Cen­tre coaxes States to cut power tar­iff slabs

The Hindu Business Line - - FRONT PAGE -

As part of an ef­fort by the Cen­tre to build a po­lit­i­cal con­sen­sus in favour of stan­dar­d­is­ing elec­tric­ity tar­iffs across the coun­try, Min­is­ter of State (In­de­pen­dent Charge) for Power and Re­new­able En­ergy, RK Singh, on Thurs­day coaxed State gov­ern­ments to re­duce the num­ber of slabs for sell­ing power.

Af­ter the Con­fer­ence of Power and New & Re­new­able En­ergy Min­is­ters of States and Union Ter­ri­to­ries, Singh told newsper­sons that “it has been de­cided (at the meet­ing) that the num­ber of power tar­iff slabs across States will be re­duced to 12 to 15 from up to 90 slabs ex­ist­ing to­day in some States.”

How­ever, the suc­cess of this pro­posal will hinge on the States’ will­ing­ness to im­ple­ment it as elec­tric­ity is a State sub­ject and has po­lit­i­cal as well as fi­nan­cial im­pli­ca­tions.

If im­ple­mented, this would mean mov­ing closer to bring­ing elec­tric­ity un­der the am­bit of the Good and Ser­vices Tax regime. The cur­rent vari­a­tion in power prices and the dif­fer­ing tax struc­tures make it dif­fi­cult to have a uni­form tax rate on power across the coun­try. Once there is par­ity be­tween power tar­iff slabs, it will be eas­ier to have fit them in the GST slabs.

Singh also said the cross-sub­sidy on power should be re­stricted and con­sumers should not be bur­dened by the in­ef­fi­cien­cies of power dis­tri­bu­tion com­pa­nies.” In effect, he was hint­ing at a likely shift of sub­sidy from the seller (in this case, the dis­trib­u­tor) to the con­sumer.

The gov­ern­ment aims to bring cross-sub­sidy lev­els down to 20 per cent from the cur­rent 200 per cent in some cases, he added.

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