Power shortage will endanger the very survival of SMEs: KASSIA
Updated: Jul 03, 2014 04:20:36pm
Bengaluru, Jul 3 (KNN) Energy Minister DK 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).
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, who will bear the major brunt of the power shortage, it 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. “The problems are not insurmountable. If Gujarat can turn from a power-deficit to a power-surplus State, why not Karnataka?”
Explaining how the consequences of deteriorating power supply are going to be devastating, Rajamane 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.
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 neighboring power-healthy states, loss of tax revenue to the Government, and rising NPAs and bad loans in banks.
The rise in diesel prices has also made reliance on diesel powered generators unviable, as the cost of generating power exceeds Rs 12 per unit (including direct and indirect costs).
Considering the all-round adverse fall-out of power shortage, KASSIA has urged the Chief Minister, Siddaramaiah to involve experts and all political parties and arrive at immediate solutions to the power-grid.
KASSIA has also appealed to the ESCOMS to adopt scheduled power cuts and consult all industry/trade bodies before taking any decisions affecting the MSME sector, whose contribution to job creation is second only to agriculture. (KNN/ES)
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, who will bear the major brunt of the power shortage, it 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. “The problems are not insurmountable. If Gujarat can turn from a power-deficit to a power-surplus State, why not Karnataka?”
Explaining how the consequences of deteriorating power supply are going to be devastating, Rajamane 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.
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 neighboring power-healthy states, loss of tax revenue to the Government, and rising NPAs and bad loans in banks.
The rise in diesel prices has also made reliance on diesel powered generators unviable, as the cost of generating power exceeds Rs 12 per unit (including direct and indirect costs).
Considering the all-round adverse fall-out of power shortage, KASSIA has urged the Chief Minister, Siddaramaiah to involve experts and all political parties and arrive at immediate solutions to the power-grid.
KASSIA has also appealed to the ESCOMS to adopt scheduled power cuts and consult all industry/trade bodies before taking any decisions affecting the MSME sector, whose contribution to job creation is second only to agriculture. (KNN/ES)
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