Captive power users may get tax sops

Tax concessions will be extended to fuel for industrial units willing to use captive power capacities, Maharashtra Industries Minister Ashok Chavan promised industrialists on Monday. A huge power shortage of 6,000 Mw is being experienced by industry in Maharashtra.

He was responding to suggestions, objections and criticisms levelled by representatives of industries in a meeting called by state energy ministry and industry ministry to discuss the issue of introducing a second day of power cut in industrial areas.

Apart from the representatives of industries association meeting was attended by Chavan, energy minister Dileep Walse-Patil and senior officials from both the ministries.

Speaking at the meeting chairman of the Maharashtra Chamber of Commerce, Industries and Agriculture (MCCIA) Hemant Rathi said, 'Around 1,200 Mw of captive power generation capacity is available with the industry but it is mostly diesel-based capacity and industry can't utilise it unless the state provides direct subsidy or concession in excise duty and VAT on fuel like diesel as the cost of power produced by captive power plant varies from Rs 8 per unit to Rs 12 per unit.

The suggestion was echoed by various other industry association representatives. Among other suggestions included a power cut of 16 hours on two different days, and there should be power cut for 32 hours continuously. This will help the industry employ their labour and other resources more productively.

They also suggested that instead of introducing two-day power cut in the industrial areas, the industries who are provided 24x7 power supply through the express feeder and which are non-continuous industries, should be brought into preview of load shedding for four to six hours. And for that period they should be asked to utilise their own captive generation capacity.

After hearing these suggestions Chavan said, 'For the better utilisation of the 1,200 Mw of captive capacity, he will take up the issue of tax concessions in the cabinet as he himself wishes that there should not be two days of power cuts in industrial areas.'

Replying to the suggestions, Walse-Patil appealed to the industry to give their suggestions in writing to his ministry to avoid a second day of power cut and his ministry will act on these suggestions within one week.

He also said, if a second day of power cut is introduced it will be a temporary measure till the onset of monsoon and he expects that there will be a capacity addition of around 2,800 to 3,000 Mw by the end of this year. This will take care of a large part of the power shortage problem in the state.

On Tuesday, a similar meeting with industry representatives who are provided power from express feeder and continuous process industry has been called by the state government.