The Hindu Business Line : Power of populism

This is with reference to the editorial "Power of Populism" (Business Line, June 4). The power sector reforms to restore health to the SEBs and attract investments to the sector have received a setback because of the recent actions of the Governments of Andhra Pradesh, Maharastra and Tamil Nadu.

But more than that, the State governments have attempted, and to a certain extent succeeded, in by-passing the tariff fixation mechanism and reduction of cross-subsidies by levying a tax on the consumption of electricity.

Andhra Pradesh and Tamil Nadu have levied taxes on power consumption by industrial and commercial consumers who were hoping for a reduction of the cross-subsidy burden. Now Gujarat has increased the tax steeply to 40 paise per unit. This tax achieves the same effect as the cross-subsidy.

If the Government is serious about power sector reforms, the State governments should not be empowered to levy taxes/cess/surcharge, etc., on power production and/or consumption.

D. Balasundaram

Coimbatore

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