MP steel units on verge of closure as power rates spiral

High power tariffs and taxation has resulted in the closure of almost 50 per cent of iron and steel re-rollers (ISRs) and induction furnace units (IFUs) in Madhya Pradesh (MP). Also, the shortage of raw materials is adding to the woes of the steel re-rolling mills.

The ISRs and IFUs are not able to compete with units from neighbouring Gujarat, Maharashtra and Chhattisgarh which enjoy high degree of the government support.

In the last two three years, some 40 Rolling Mills of MP have been shut down and thousands of laborers have become unemployed. The state is also loosing out a major source of revenue," said S M Jain, president, All India Induction Furnace Association (AIIFA).

"Both the state government and the Madhya Pradesh State Electricity Board MPSEB are not only ignoring the problems of the industry but implementing such polices, which are threatening the very existence of the industry", he added.

The ISR and IFU industry has been put in the category of intensive power users. Due to this they have to pay 25 per cent on the total power bill and MP has one of highest power rates around Rs 5.45 per unit, Jain pointed out.

The high power tariff and shortage of raw material is forcing the industry to run the factories for only two to three days in the week, Jain claimed.

Jain further said, AIIFA approached the chief minister Shivraj Singh Chauhan and gave him the memorandum of demands for betterment of the steel industry and also asked Madhya Pradesh State Electricity Regulatory Authority to bring down the tariff from 11 per cent to 8 per cent.