The industrial sector faces loss of goodwill due to the ongoing power crisis
Commercial establishments, from small shops to big shopping malls, have been suffering power cuts of up to six hours (unofficial) and most can't afford to run on alternate power. (Photo: DC/File)
Hyderabad: Around 40 to 45 per cent of production has been hit in the power-deficient MSME and commercial sector.
Most industries and commercial establishments are unable to afford gen-sets to keep their production running. And though the situation is expected to improve slightly with the Kharif season coming to an end, the Rabi season will soon follow.
Commercial establishments, from small shops to big shopping malls, have been suffering power cuts of up to six hours (unofficial) and most can’t afford to run on alternate power.
Usage of alternate power, especially by gen-sets, has caused the per unit cost of power to shoot up from Rs 6 to Rs 16, making it unfeasible for a lot of businesses. “We have five to six hours of power cuts through the day when the business is seriously affected. Using a diesel gen-set is not sufficient for the entire floor of our showroom and moreover it increases the operational costs thrice over,” said Vishwanath Rao, floor manager of a prominent merchandise store.
The increase in cost is not only a deterrent for commercial establishments but also for small and micro enterprises. As per information provided from the office of state-level coordinator for public sector oil companies, diesel sales in the state have slightly gone down in October when compared to September.
“The consumption of diesel by the industrial sector is very small in comparison to other sectors. It therefore does not reflect on the overall consumption figures but there has not been an increase in the consumption pattern despite the power crisis,” said a senior official.
“The power holidays for the small industrial sector, along with the unofficial power cuts in between amount to three days of power cuts. This has brought down manufacturing to nearly half and since many types of industries cannot shut down operations in between as it causes loss of raw material, they have been suffering bigger losses,” said A. Nageshwar Rao, president of FAPSIA (Federation of AP Small Industries Association).
Meanwhile, the industrial sector has been demanding interest-free loans for purchasing gen-sets and a 60 per cent subsidy on diesel to cope with the persistent problem, which as per the Telangana government is likely to remain for the next three years.
Micro industries, which are defined by machinery worth up to Rs 5 crore, as well as small and medium industries, do not find purchase and running of diesel gen-sets as an easy option.
“Moreover, running diesel gen-sets is a very costly affair as the per unit cost jumps three times. The state government should provide 60 per cent diesel subsidy to the MSME (Micro, Small and Medium Enterprises) which is highly affected due to the power holidays and cannot afford even partial dependence on diesel-based power for the next three years,” said A. Nageshwar Rao, president of FAPSIA.
Diesel sales have seen no increase despite a persistent power crisis in the state. Sales have in fact dropped and the consumption from the industrial sector is too small to reflect on the sales, say oil companies.
Commercial establishments and small industries are finding it difficult to buy a generator-sets, which costs between '3 and '5 lakh.
Most industries situated in and around Hyderabad and Ranga Reddy have been highly affected by the power cuts.
While the one-day power cuts affect 10 to 20 per cent of the business and are taking a toll on delivery of products, the two-day holiday is highly damaging to the market share and goodwill of industries.
“Due to the power supply situation, most industries in this area are unable to deliver products on time. Buyers are now going to suppliers elsewhere as an alternative. This will be a long-term damage cause it involves goodwill,” said P. Krishnam Reddy, the owner of a steel industry from Hyderabad.
( Source : dc correspondent )
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