| Log in

Maharashtra cuts power tariff by 20% ahead of election

20 January, 2014

Maharashtra said on Monday it will cut electricity tariffs by a fifth with immediate effect, as the Congress party-headed state government woos voters ahead of national elections later this year.

The tariff cut follows a similar move by the newly elected Delhi state government in January, and sparked demands by lawmakers in other states for similar reductions.

Many Indians see cheap or free power as a right, not a privilege. But by keeping tariffs low, politicians have strained the finances of local distribution companies, who often resort to crippling power cuts. In turn, such blackouts hobble the competitiveness of Asia’s third-largest economy.

The tariff cut in Maharashtra, applicable to customers of the state electricity distribution company Mahavitaran, which supplies power to the entire state except Mumbai, will cost a total of 7.06 billion rupees every month.

Of this, Mahavitaran will bear a loss of 1 billion rupees, while the balance will be paid by the government as subsidy, an official in the chief minister’s office told Reuters.

The government will also decide in eight to ten days on how to extend the benefit to customers in Mumbai, India’s financial capital. Electricity in Mumbai is distributed by private sector companies Reliance Infrastructure, Tata Power and state-controlled BEST.

The Delhi state government, run by the newly-founded Aam Aadmi (Common Man) Party, in January began to subsidise power tariffs for lower usage residential customers.

Prime Minister Singh’s government has attempted to fix the financial health of distribution companies with a $32 billion bailout package that it rolled out last year, that came with strict riders.


Leave Your Comment
Delhi govt moves to scrap power distribution licences

Delhi govt moves to scrap power distribution licences

Reuters 4 years ago
The Delhi government has asked state’s power regulator to scrap the...
Govt may extend tax benefits to big power projects

Govt may extend tax benefits to big power projects

Reuters 1 year ago
India will put forward a proposal in its cabinet on Friday to give 25 large...
Spanco In Talks With PE Investors; Ramps Up

Spanco In Talks With PE Investors; Ramps Up

Reuters 7 years ago
Telecom and IT services firm Spanco Ltd is in talks to bring in private equity...
No Comments

Maharashtra cuts power tariff by 20% ahead of election

Powered by WordPress.com VIP