Power cuts to hit TS Inc hard

Industries are likely to suffer 15 to 20% production loss on account of two-day power holiday; SME entrepreneurs are in a catch-22 situation as they can’t blame the new state for the power deficit

Hyderabad: The two-day power holiday announced by Telangana government on Tuesday is likely to leave an adverse impact on the industries, particularly the manufacturing sector, with production loss estimated at anywhere between 15 to 20 per cent. Continuous process industries such as bulk drugs and foundries will be hit hard as they need power 24X7 to get optimum production.

Industries have been subjected to one-day power holiday after the formation of the new state, but the government has extended the holiday by another day on Tuesday in order to supply more power to agriculture sector.

“We have been facing power shortages for the past five years. Power cuts have crippled the industry, particularly small and medium enterprises (SMEs). But it is the first time that we are forced to bear the power cuts during rainy season. We don’t know how bad the situation will be during summer months,” J Nageswara Rao, President, Fapsia, a leading SME industry body, told The Hans India.

According to him, industries will suffer huge production losses on account of power cuts. “We can’t execute orders and supply products to clients in time. Such a situation will have a cascading effect on the industries as they can’t service bank debt if there is no production and no payments from the clients,” he explained.

Rao however did not find any fault with the Telangana government on this issue. “We have a new state and new government. Chief Minister already made it clear that there would be no adequate power till three years. However, government should have purchased some power to tide over the crisis,” he said, urging the government to facilitate loans to SMEs to purchase gensets, and supply diesel at subsidized prices.

Stating that there would 15 to 20 per cent production loss due to power cuts, V Anil Reddy, Sr Vice President, Fapcci, hoped that the power cuts would not last long. “I got to know that the two-day power holiday would continue till November 15 as government wants to supply more power to the agriculture till that time to save crops,” he maintained.

He further said the power situation would remain same for nearly a year and a half and so government should work out a plan to minimize the damage to the industrial sector. “The problem here is that Telangana state doesn’t have ERC (Electricity Regulatory Commission). Until there is ERC, it is not easy to address the issue,” he pointed out.

Admitting that industry would suffer hugely on account of the power cuts, A P K Reddy, President, Federation of Small and Medium Enterprises (FSME), said many SMEs in Telangana were not getting new orders. “Clients are citing power cuts as the reason for not giving orders to SMEs here,” he said. Government also can’t do anything as there is power deficit, he added.

“TS govt should help SMEs in getting loans for gensets without collateral security. Besides, it should remove VAT diesel and gensets. That way, industries in the state will get some relief until the power situation improves,” he added.