Nation Current Affairs 09 Sep 2017 Rift over power subs ...

Rift over power subsidy in AP

Published Sep 9, 2017, 6:40 am IST
Updated Sep 9, 2017, 6:40 am IST
Some ministers insist subsidy of Rs 300 crore be extended to ferro alloys.
 (Representational image)
  (Representational image)

Vijayawada: Rift between the energy sector and the group of ministers (GoM) set up exclusively for taking care of industry incentives and tax holidays, has been widened, as a few ministers are insisting to extend the power subsidy of Rs 300 crore to the identified ferro alloys’ industries.

The Energy department, which is already running into losses, has expressed its helplessness to support the subsidy cause and clause.


In fact, this subsidy has been extended to these ferro alloys industries since 2002, across the state. However, with the intervention of some officials, sometimes the subsidy has been withdrawn.

Hopes of thousands of workers, who lost their jobs with the closure of ferro alloy companies in Vizianagaram, were revived with the announcement of the government to help these industries last September.

The AP government announced a subsidy of Rs 1.5 on each unit of power consumed by these firms in August last year. This decision became helpful to the managements of the companies to restart operations.


Around 10 ferro alloy units in Vizianagaram were closed due to the high tariff for power. At the same time, the declining price of the product in international market also forced them to shut down their furnaces.

For over two years, workers of Jindal Stainless, Deccan Ferro, Andhra Ferro Alloy, SKS Ferro Alloy, Facor industries in Bobbili, Kothavalasa, Cheepurupally and Garividi have been jobless.

However, in the name of getting power subsidies, few ferro alloy companies have reportedly entered into an unethical agreement with few senior officers and peshis of two ministries and started exerting pressure over the government to provide power subsidy this year also.


However, the state vigilance department has reviewed the entire episode. The vigilance unearthed a scam in the name of power subsidies and reportedly advised the government to have a social audit over the same. Since, Cabinet meeting scheduled on Saturday would discuss these issues, few senior officers of two ministries are a worried lot, according to the personnel of two ministries. 

Last year, the association of ferro alloy industries had approached the government and requested subsidy of Rs 1.5 on each unit of power. They were paying Rs 4.87 then.


The government also agreed to their request and announced that it would support the industry and it allowed them to pay the pending power bills on instalment basis. The ferro alloy industries wanted the same to happen this year.