Delhi plans AC tax to take on 'unsustainable luxury'

Alarmed by the sudden increase in peak night demand for power as compared to peak day demand, the Delhi government has mooted a proposal to impose a tax or cess on air conditioners (ACs) in the city, blaming it for the change in consumption pattern.

Data from Delhi Transco, the city government-run transmission firm, shows peak night demand on the night of May 19 reached 4,406 Mw at 10:54 pm, while peak day demand was 4,083 Mw at 3:30 pm. The same thing happened the next day, with peak night demand in the city reaching the season's highest, 4,751 Mw at 11.15 pm, while the day demand was 4,665 Mw at 3.30 pm. The maximum temperature on both days was 45 degrees Celsius, while the minimum was 30 degrees. Officials said the change in demand pattern was unusual; normally, power demand during the night is lower than daytime, since industries, shops, offices and malls close. It indicated that citizens were heavily using their home ACs, they said.

"The steady increase in AC sales in the capital has pushed power demand to record highs during the night time," said one, explaining the reason for floating the proposal for a tax or cess on these. Data from industry officials showed AC sales in Delhi had indeed risen by at least 10 per cent in 2013 as compared to 2012.

Annually, they said, around three million units of ACs were sold across the country, comprising both window and split ones. Of this, industry estimates show almost 40 per cent are in North India, as summers are harsher here than elsewhere in the country. Delhi alone accounts for 10-15 per cent of the country's total AC market.

Figures available for May showed that across India, AC sales rose by at least 10-25 per cent as compared to the same period last year. "Given that Delhi is a big market for ACs, sales have definitely gone up by 10 per cent," said a senior executive from a leading AC manufacturer.