Small industries in Karnataka fear shut down, layoffs due to power crisis
Updated: Jul 07, 2014 01:53:34pm
Bengaluru, Jul 7 (KNN) The small industries in Karnataka fear dip in production, layoffs and shut-downs after the state Energy Minister D K Shivakumar said in the Assembly that the Government cannot provide 24/7 power due to a daily shortage of 1000 MW.
“Energy Minister D K Shivakumar's admission in the Assembly that the Government cannot provide 24/7 power due to a daily shortage of 1000 MW has come as a rude shock to the small scale industrial sector of Karnataka,” said Karnataka Small Scale Industries Association (KASSIA) in a press release.
This is going to put a question mark over the very survival of the eight lakh micro, small scale and medium enterprises in the State, 40 per cent of which are based in Bangalore, and who will bear the major brunt of the power shortage, the association said.
"After the constant increase in power tariff which works out to almost the highest in south India, we have the legitimate right to expect uninterrupted power," said President, Kassia, Chidananda M Rajamane adding, "The problems are not insurmountable. If Gujarat can turn from a power-deficit to a power-surplus state, why not Karnataka?”
Rajamane further observed, "The small scale industries will see a dip in production which might lead to layoffs, shut-downs, and lockouts. This will have a disastrous effect on the workers already reeling under price rise and high inflation. Is this the kind of signal the Government wants to give to potential investors and the workforce before its next edition of the Global Investors Meet?"
KASSIA had pinned its hopes on an assurance given by the Energy Minister as recent as a fortnight ago that the power crisis would be sorted out in a month, the press release said.
MSME entrepreneurs feel that the Government simply cannot get away by washing its hands off power supply, because of the reverse multiplier effects on industrial growth. At a time when the SMEs are coping with declining order books, this loss of production on account of lack of power will further lead to diversion of orders to neighbouring power-healthy states, loss of tax revenue to the Government, and rising NPAs and bad loans in banks, it added.
The rise in diesel prices has also made reliance on diesel powered generators unviable, as the cost of generating power has exceeded Rs 12 per unit (including direct and indirect costs), the association said.
Last week, Shivkumar had said that with water-level in the hydel power generating reservoirs in Karnataka at less than 50 per cent of the capacity, “god alone can save the State” from facing a power crisis.
The Minister had said that inflow into three hydel power-generation reservoirs of Linganamakki, Supa and Mani was about 40 per cent. Only good monsoon could improve the situation, he said, and added that 150 taluks may have to be declared as drought hit this year. (KNN/SD)
“Energy Minister D K Shivakumar's admission in the Assembly that the Government cannot provide 24/7 power due to a daily shortage of 1000 MW has come as a rude shock to the small scale industrial sector of Karnataka,” said Karnataka Small Scale Industries Association (KASSIA) in a press release.
This is going to put a question mark over the very survival of the eight lakh micro, small scale and medium enterprises in the State, 40 per cent of which are based in Bangalore, and who will bear the major brunt of the power shortage, the association said.
"After the constant increase in power tariff which works out to almost the highest in south India, we have the legitimate right to expect uninterrupted power," said President, Kassia, Chidananda M Rajamane adding, "The problems are not insurmountable. If Gujarat can turn from a power-deficit to a power-surplus state, why not Karnataka?”
Rajamane further observed, "The small scale industries will see a dip in production which might lead to layoffs, shut-downs, and lockouts. This will have a disastrous effect on the workers already reeling under price rise and high inflation. Is this the kind of signal the Government wants to give to potential investors and the workforce before its next edition of the Global Investors Meet?"
KASSIA had pinned its hopes on an assurance given by the Energy Minister as recent as a fortnight ago that the power crisis would be sorted out in a month, the press release said.
MSME entrepreneurs feel that the Government simply cannot get away by washing its hands off power supply, because of the reverse multiplier effects on industrial growth. At a time when the SMEs are coping with declining order books, this loss of production on account of lack of power will further lead to diversion of orders to neighbouring power-healthy states, loss of tax revenue to the Government, and rising NPAs and bad loans in banks, it added.
The rise in diesel prices has also made reliance on diesel powered generators unviable, as the cost of generating power has exceeded Rs 12 per unit (including direct and indirect costs), the association said.
Last week, Shivkumar had said that with water-level in the hydel power generating reservoirs in Karnataka at less than 50 per cent of the capacity, “god alone can save the State” from facing a power crisis.
The Minister had said that inflow into three hydel power-generation reservoirs of Linganamakki, Supa and Mani was about 40 per cent. Only good monsoon could improve the situation, he said, and added that 150 taluks may have to be declared as drought hit this year. (KNN/SD)
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