Power cut hits Gujarat industry hard

The three-days power cut imposed by the Gujarat government has hit the industry hard says Confederation of Indian Industry (CII), Gujarat.

Amresh Dhawan, chairman, Gujarat Council, CII, told the media in Ahmedabad that CII had proposed the state government to allow industry to function during the night so that it can make up for the loss of production due to power cut.

The worsening power crisis in Gujarat has forced the state government to impose three days, mandatory holidays for the High Tension (HT) and Low Tension (LT) non continuous process industry in the state for one week starting from last Saturday. For the High Tension (HT) continuous process industry, the supply has been curtailed by 20 percent by the state government for one week.

The state government imposed one day power cut for the non continuous HT and LT industry during the middle of last week when the farmers requested for more power for their kharif crop. When contacted Saurabh Dalal, state minister for power said the power cut may be withdrawn after a week as additional power supply for irrigation is required only for the last lag of cultivation.

The dry spell at the fag end of the monsoon season has jeopardized the prospects for the khariff crop in the state. The state government is under pressure from the farm lobby to take steps to ensure more power for the standing crops across the state.

CII Gujarat says Gujarat being the largest exporting state in the country, if it fails to fulfil its export obligations due to power cut it would be a loss of future business for the state. Dhawan said many individual commitments of the exporters are at risk. The companies have made commitment with certain deadlines and now there is no power to meet this commitments.

Gujarat state, the only state to have the power-surplus in the country, according to chief minister Narendra Modi, has imposed a three-day power cut on the industrial sector. The state government has take the decision of power holidays for industries on Saturday, to provide additional electricity to the starving agricultural sector, so that the standing crop can be saved.

It may also be recollect here that, the state government had released advertisements in Maharashtra to attract investors when the neighbour was facing acute shortage of power during last summer season.

Power cut is expected to hit the economy of the state of Gujarat hard, according to the industry representatives. It was learnt that the representatives of various trade and commerce are planning to ask the government to reconsider the decision in the interest of the economy.

Dilip Chasmawala, president of The Southern Gujarat Chamber of Commerce and Industry, told Business Standard, "The state government has been forced to impose the power-cut on industries in view of the shortfall in rainfall. Though the government's intention is good, it would have been better if instead of imposing the power cut, the government adopted some other method."

He said that the government could have asked the industries to observe closure on a voluntary basis, or levied restrictions on utility of power. The government could have appealed against using air conditioners, and other goods which consume high power, for the time being."

According to Chasmawala, "The diamond industry will be the worst affected by the three-day power cut. The jari industry as well as the textile industry, will also be badly hit. The industries will suffer production losses of around 20 to 25 per cent on account of the cut."

Leading diamond businessman Pravin Nanavati, said, "The big diamond units have the facility of generator, and hence will not be affected much by the three-day power cut. However, the smaller units, which are lacking in such a facility, will certainly be affected.

The production in the diamond industry will come down by 8 to 10 per cent, which is not a small percentage by any means."

"The diamond workers, whose earnings are directly dependent on the quantity of work done by them, will be the worst affected. The power cut could easily spoil the festival celebrations of lakh of people connected with the diamond industry," he said, adding, "The state government should reconsider its decision and look for optional ways."

Jitu Vakharia, a leading processor of Surat, said the power-cut could not have come at a worse time. "After a long period of recession, the processing sector was showing signs of recovery. The markets were picking up and the demand for textiles for going up. Most of the processing units were working at 70 to 80 per cent of the capacity. However, the power-cut will disrupt the process, and cause huge losses to the sector."

It may be mentioned here that the state government is also buying about one crore unit of electricity from eastern grid with an expenditure of Rs 100 crore to meet the demand from agriculture sector during the month of September due to delayed rains.