Continuing power crunch disrupts small biz output
NEW DELHI: Small businesses have been hit disproportionately hard by the continuing power crisis, with several having to shut operations during outages, causing production losses, and others with power backup forced to bear increased costs during the second half of April, when cuts were more frequent and prolonged, said industry executives.
“Power outages lead to loss of production opportunities and the usage of power backups nearly doubles the cost of power,” said Anil Bhardwaj, secretary general of the Federation of Indian Micro and Small and Medium Enterprises (FISME). He said the cost of power soars to ₹12-13 per unit in case of power backups from the ₹4-6 per unit generally charged by distribution companies.
With the sharp rise in the cost of power, the overall cost of production for micro, small and medium enterprises (MSMES) rose by 4-5% in the second half of April, said Animesh Saxena, former president of FISME.
Further, it is only the MSMES which generally have power backups in the form of dieselpowered generators. Micro enterprises generally do not have such backups, given their high operating costs, which forces them to shut operations during power cuts.
MSME clusters across the country felt the impact of the power crisis last month.
Although industries have faced power outages in the past too, the current crisis gains more significance as businesses are now in a recovery mode after the massive blow from consecutive waves of the pandemic and the resultant lockdowns and restrictions.