The MSMEs have requested the state government to reconsider the GO to withdraw permission for companies operating below one MW denying the open access as this will affect the companies' growth.
Coimbatore: The MSMEs have expressed concern over the Government order to withdraw the facility for allowing small and medium enterprises to purchase electricity from private parties.
The Tamil Nadu Electricity Regulatory Commission has issued a draft notification to implement the government order to withdraw the facility of allowing industries operating below one MW to purchase power from private parties through 'open access' mode. Various industry bodies have urged Tamil Nadu Electricity Minister Senthil Balaji to continue to implement the existing policy as the small and medium scale industries will face a disaster.
Jagadish Chandran, Secretary, South Indian Spinning Mills Association (SISPA), said that," Back in 2010, the then DMK CM Karunanidhi facilitated, with a vision, an amendment to the Act for micro, small and medium enterprises (MSMEs) to buy power from private parties under one MW through open access system." he stated that in today's scenario, if electricity is purchased from a private party, one can save 80 paise per unit. As a result, small and medium scale industries in Tamil Nadu benefited immensely and developed.
On April 17, 2018, an order was issued to withdraw the policy. Subsequently, the Tamil Nadu Electricity Regulatory Commission issued a draft notification on March 16 to implement the above Government Order. If the policy is changed, the micro, small and medium scale industries in Tamil Nadu will face economic losses by increasing the cost of production.
He further stated that the MSMEs in Tamil Nadu will come to a standstill. For example, in a spinning mill running under one MW, the cost of production will increase by up to Rs.48 lakh. "Therefore, keeping in view the industrial growth, we request the Government of Tamil Nadu to continue to implement the policy decision that industries which are practically less than one MW can buy power from private parties on contract basis."
Ashok, president of the Tamil Nadu Consumer Association (TECA), said that all MSMEs in Tamil Nadu are benefiting immensely from the 2010 amendment to the Act which allows industries below one MW to purchase electricity from private parties on contract basis. The Government of Tamil Nadu's draft notification to implement the 2018 Government order to withdraw the facility of purchase of electricity by industries below one MW under open access system will collapse the MSMEs, and thus the government should implemet the present scheme.
"On behalf of our association, we have sent a letter to the Tamil Nadu government urging it to continue its implementation on the impact of withdrawing the existing policy."
Ramesh Babu, president of the Coimbatore District Small Scale Industries Association (CODISSIA), said that "Industries operating under one MW are able to save 80 paise per unit as they get electricity from private parties on contract basis. With the withdrawal of this policy now, small and medium enterprises (SMEs) will have to face a huge financial crisis."
He further stated that the Small and Medium Enterprises play an important role in the industrial development of Tamil Nadu. Keeping in view the industrial growth, the Government of Tamil Nadu should continue to implement the existing policy. The CODISSIA has also written to Tamil Nadu Electricity Minister Senthil Balaji to consider their demand.
Surulivel, vice-president of the Tamil Nadu Small and Tiny Industries Association (TANSTIA), said the existing policy of enabling purchase of electricity from private parties on contract basis has greatly benefited the medium enterprises in Tamil Nadu. If the Tamil Nadu government withdraws its existing policy, it will create a huge financial crisis for the industries which are already reeling under various issues, including the spread of covid-19 pandemic and rise in raw material prices.
"Small and medium scale industries will come to a standstill. Keeping this in mind, the Government of Tamil Nadu should help in continuing the existing policy."
Sivashanmuga Kumar, president of the Tamil Nadu Micro and Small Foundry Owners Association (COSMAFAN), said "The foundry industries are facing a huge crisis due to the rise in raw material prices. "The sector will face a huge financial crunch if the amended policy of allowing them to get power from private parties on contract basis below one MW is withdrawn."
It is to be noted that the number of foundry industries operating across Tamil Nadu is from the small and medium category. Therefore, the Tamil Nadu government should reconsider this decision.
Arulmozhi, an office-bearer of the Tamil Nadu Open End Spinning Mills Association (OSMA), said "Most of the open-end mills operating across Tamil Nadu belong to the small and medium segment. Therefore, if the concession given to industries operating under one MW to get power from private parties on contract basis is cancelled, the industry will face a huge financial crunch. The entire industrial growth will be severely affected. Therefore, the Tamil Nadu government should reconsider this decision."