Textile industry in Tamil Nadu has urged the CM of the state for moderation in power tariff hike even as Tamil Nadu Electricity Regulatory Commission has notified the revised tariff orders for energy charges and different services provided by TANGEDCO.
The steep hike across the services would erode competitiveness of the HT/EHT consumers especially the power intensive sectors of textile industry in the state.
The approximate net power tariff increase for the textile industry works out to Rs.1 per unit, and 1kg yarn manufacturing needs on an average 5 units and thus increases the yarn price by Rs.5 per kg.This would affect the competitiveness of the downstream sectors like powerloom, handloom, garment and made-ups segments that have already raised voices against any increase in yarn price.
As per experts, for a spinning mill having 25,000 spindles, the power tariff increase per year would be to the tune of Rs.1.2 crore.
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The industry is of a strong view that the increase of demand charges from Rs.350 per KVA to Rs.550 KVA, is an abnormal hike when compared to most of the states in the country. The increase in peak hours from 6 to 8 hours and also increase in peak hour charges from 20 per cent to 25 per cent is very high.
It can be mentioned here that Tamil Nadu textile industry that accounts 1/3rd of the country’s textile business size and around 45 per cent of the spun yarn manufacturing (spinning) capacity of the nation, fetches around Rs.1 lakh crore forex earnings, provides direct jobs to over 60 lakh people in the state, paying around Rs.4,000 crore SGST, etc.
Ravi Sam, Chairman, The Southern India Mills Association (SIMA), said that the power intensive textile industry would become uncompetitive with the recent steep increase in the power tariff. “The state is already uncompetitive and could not make sizable investments in modernisation,capacity expansion and green field projects when compared to the raw material rich (cotton and man-made fibres) states like Gujarat and Maharashtra,” he said.
The power cost accounts over 40 per cent of the cost of production and with the revised power tariff, the spinning and weaving mills in the state would become uncompetitive.
While appreciating the tariff revision after a period of 5 years, SIMA Chairman has stated that TNERC has failed to consider the erosion of global competitiveness of the power intensive sectors like textiles.
He said that while the State Government has taken concerted efforts to attract over Rs.2.2 lakh crore investment through attractive industrial policies, the revised tariff would become detrimental for the new investments.
