Maharashtra steel industry demands to continue power subsidy for backward regions
Maharashtra steel industry demands to continue power subsidy for backward regions

The Maharashtra steel industry has urged the state government to resume power subsidies for enterprises and provide a higher budgetary allocation of Rs 1,800 crore for this to support industries in backward regions such as Marathwada and Vidarbha.

Steel Manufacturers Association of Maharashtra President Yogesh Mandhani said that the per-unit cost of electricity had come down to 5 from 8 earlier due to the subsidy provided by the government.

To boost industry in backward regions in the state, the state government had introduced a subsidy on power tariff for industries in Marathwada, Vidarbha and Khandesh regions in line with the recommendations of the Vijay Kelkar committee.

Initially, no caping was done but later, the government budgeted this subsidy to 1,200 crore a year. The government had allocated Rs 1,200 crore for paying subsidy via Maharashtra State Electricity Distribution Co Ltd (MSEDCL) but the amount was exhausted in December 2020. As a result of this, industries are now paying the power bill at the full rate.

The steel industry, among all others, used to get subsidies in the range of 5-7 per cent on electricity bill based on their performance but now, all these industries are paying more cost per unit.

The issue was raised by MLA Kailash Gorantyal, who demanded that the government should increase the annual subsidy from Rs 1,200 crore to Rs 1,800 crore from this current financial year itself.

Mandhani said he has also submitted a memorandum to Energy Minister Nitin Raut in this regard.

"We have demanded to remove the imbalances of the industry in the state by allocating subsidy," he said.

He also added that due to the highest tariff, the state's companies could not compete with the neighbouring states like Chhattisgarh, Gujarat and Madhya Pradesh, which are having lower tariffs and other beneficial incentives.

"We request the government to provide a budgetary allocation of Rs 2,500 crore annual to incentives industries, as many more industries are likely to come due to this subsidy," Gorantyal.

He added that the steel industry is already facing a crisis due to high cost and stiff competition, and the discontinuation of subsidy has added to their problems.

In Jalna, 50 small and medium enterprises are running that provide employment.

Industrialist Satish Agarwal expressed thanks to Gorantyal for raising the issue.

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