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More than 6,000 manufacturing units in Andhra Pradesh are on the brink of closing down and becoming non-performing assets (NPAs) due to severe power crisis in the State.
These units may result in loss of over two lakh jobs, according to Devendra Surana, President of Federation of Andhra Pradesh Chamber of Commerce and Industries (Fapcci).
Majority of these units are in the small and medium enterprise segment and some in the large industry category. Their business has become unviable due to nearly 15 days of no power in a month and high power tariffs.
Addressing a press conference here today along with several representative industry bodies, including that of ferro alloys, steel units, industrial areas and Federation of small units association, the industry representatives said that the manufacturing sector in Andhra Pradesh is in for a major de-growth.
Already the manufacturing sector contribution to State Gross Domestic Product has come down to single digit from 11 per cent a year before, mainly due to power cuts. And this is likely to dip further if the current trend continues, they added.
The contribution of manufacturing sector to the State economy at less than 10 per cent is lower than the national average of 16 per cent and 27 per cent in Gujarat, Surana said.
Referring to huge power tariff hike beginning April 1 for the current financial year, Fapcci and its affiliated industry bodies said that the tariff hike works out to about 25 per cent and goes up to a high 50 per cent in some cases.
Industrial tariff
The industrial tariff has doubled in three years. But the economic conditions have continued to be hard for the industrial sector. The growth is muted. But in the last 18 months industrial power cuts and tariff hikes have made projects financially unviable, they said.
While supporting the Government’s move to subsidise some sections of society, including the farm sector, they felt that the Government should provide necessary finances. But the practice seems to be to pass on the subsidy burden to industrial sector, which is forced to bear the brunt of cross-subsidy.
rishikumar.vundi@thehindu.co.in
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