Competitive power tariff for businesses?
The govt seeks to do away with consumer categories such as commercial, domestic, agricultural, industrial and institutional, according to the draft amendments in the tariff policy
New Delhi: The National Democratic Alliance government has proposed to rationalize electricity tariff categories, simplify slabs and make them more competitive for businesses in a push to its Make in India drive.
The government seeks to do away with consumer categories such as commercial, domestic, agricultural, industrial and institutional, according to the draft amendments in the tariff policy, which is available on the power ministry’s website. Effectively, all consumer categories will have to pay the same tariff for the same volume of electricity consumed, if they have the same load and voltage.
“In order to have a simplified tariff structure across all discoms, the tariff structure should do away with the concept of having different tariff for usage by different categories of customers. The principle adopted is paying a price for use of electricity as a commodity which should not be different for different category of usage like in domestic/commercial/industrial etc but it should be based on load used and energy consumed,” stated the draft.
Power minister Raj Kumar Singh has been pushing for tariff rationalization to make the tariff competitive for the Indian industry to grow.
The draft amendments also made a case for India’s electric vehicle (EV) mobility push by stating that state electricity regulatory commissions may create a separate category for EV charging stations if required.
Experts welcomed the move. “Basing tariffs on load and consumption is progressive and removes categorisation issues for a commodity like electricity. It takes care of subsidy, cross subsidy, differential voltage,” said Sambitosh Mohapatra, partner at PwC India.
The Union government plans to provide ₹1,000 crore as subsidy for building a nationwide charging infrastructure for EVs.
The government plans to have 1,000 charging stations across the country especially on major highways such as Delhi-Chandigarh, Delhi-Mumbai and Mumbai-Surat-Pune stretch.
Any shift to EVs will help India’s strategy for achieving its climate change commitments. This assumes significance in a country that is now the biggest emitter of greenhouse gases after the US and China, and which is among the countries most vulnerable to climate change. India plans to reduce its carbon footprint by 33-35% from its 2005 levels by 2030, as part of its commitments to the United Nations Framework Convention on Climate Change adopted by 195 countries in Paris in 2015.
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