Industry & Economy
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Power
`No benefits for power sector in short term'
Our Bureau
New Delhi
,
Jan. 8
THE tax cuts accorded to the power sector are unlikely to significantly benefit the sector in the short run and the consumer tariffs across the country will hardly be impacted, according to industry officials.
The Government today reduced the basic duty on sub-transmission and distribution sector from 25 per cent to 10 per cent. In the case of meters (to record power consumption), the basic customs duty has been reduced from 25 per cent to 15 per cent.
"This will show results only in the long run. This, since imports will require to be supported by servicing and as well quality standards, which will take time to develop. Currently, imports are marginal and the total import duty collection has been of the order of Rs 86 crore per annum," a private distribution company (discom) head told Business Line.
Equipment in this segment range from switch-gears to cables to transformers.
In a sense, there is an air of disappointment since the Power Ministry and the industry were pushing for a cut in excise duty with the Finance Ministry.
This is because the turnover of the industry is of the order of Rs 5,000 crore per annum and a reduction in duties would have reduced costs and in turn power tariff.
In the long term, the country will require 60 million meters to ensure 100 per cent metering. As against this, the domestic production is 24 million per annum, leaving room for imports to make inroads.
The Government today also accorded a reduction in customs duty on coal from 25 per cent to 15 per cent. The reduction in duty on coal will improve the viability of coast-based thermal power stations and in turn reduce the power costs.
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