KASSIA Flags Impact Of KERC’s True-Up Charge On MSMEs In Karnataka

ENA MSME 2026-04-21 12:33:41 Bengaluru, Apr 21 (KNN) The Karnataka Small Scale Industries Association (KASSIA) has expressed concern over a recent order by the Karnataka Electricity Regulatory Commission (KERC) approving an additional 56 paise per unit true-up charge for consumers under Bangalore Electricity Supply Company (BESCOM), effective May 1, 2026. The charge is aimed at recovering a revenue gap of Rs 2,068.38 crore for FY 2024 25 and will be collected in monthly instalments until April 2027, rather than being added as a permanent tariff increase. Impact on MSME Sector KASSIA said the additional charge would significantly increase operational costs for Micro, Small and Medium Enterprises (MSMEs), where electricity constitutes a major input expense. The association noted that the revision comes at a time when MSMEs are already facing challenges such as rising input costs, high interest rates and weak demand, potentially affecting their competitiveness. Concerns Over Retrospective Burden The industry body highlighted that the true-up charge is linked to past consumption, effectively imposing a retrospective financial burden on businesses that had already accounted for earlier costs. It also pointed out that the cumulative impact of repeated tariff revisions and surcharges could further strain working capital, especially for small enterprises operating on thin margins. Call for Relief and Review KASSIA has urged the Karnataka government and the regulatory commission to reconsider the structure and quantum of the charge. It has also called for targeted relief measures or concessions for MSMEs and alternative approaches to address revenue gaps. The association further emphasised the need for greater transparency and stakeholder consultation before implementing such financial adjustments. Wider Economic Implications KASSIA warned that increased energy costs could have a cascading impact on production, pricing and employment, given the MSME sectors critical role in economic growth and job creation in Karnataka. The association has called for a balanced and industry-friendly approach to safeguard MSME interests while addressing the financial requirements of the power sector. (KNN Bureau) 45862 https://knnindia.co.in/news/newsdetails/msme/kassia-flags-impact-of-kercs-true-up-charge-on-msmes-in-karnataka 2026-04-21 12:33:41 knnindia.co.in KASSIA Flags Impact Of KERC’s True-Up Charge On MSMEs In Karnataka