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Govt readies subsidy suit

Calcutta, Jan. 9: The government is set to challenge in Calcutta High Court the order of the State Electricity Regulatory Commission that asked power utilities to collect tariffs at uniform rates by abolishing cross-subsidy.

Chief minister Buddhadeb Bhattacharjee has asked advocate-general Balai Ray to file a case against the order, describing it as “anti-people’’.

Under instructions from the chief minister, Ray today met power minister Mrinal Banerjee at the high court to finalise the formalities before filing a suit.

The commission had asked the power supply agencies in the state to introduce uniform tariff for all consumers and in all sectors. If the order is abided by, the tariffs will be the same for all consumers, industrial, domestic, commercial or agricultural.

The state government had been providing power at lower rates to the farmers and small-scale industries. The tariffs were higher for industrial consumers. In cross-subsidy, a segment of consumers that pays higher tariffs actually pays for the segments paying lower rates.

After the commission abolished cross-subsidy, political parties cutting across ideologies voiced protest. The order goes against the interests of the poor and the agriculture sector, they said.

The ruling Left Front, which has a major vote bank in rural Bengal, was likely to bear the brunt of the order with the panchayat polls round the corner. The government is now exploring ways to find out whether the tariff can be subsidised for the poorer sections.

“Under no circumstances shall we abolish the subsidy system that is in practice. We must continue with the cross-subsidy for the development of the state and to protect the interests of the poor and small and marginal farmers. We can’t accept that a multi-millionaire industrialist and a farmer will pay tariffs at the same rate,’’ Banerjee said.

“We shall file the case in days. Today, we held talks with the power minister to finalise the legal formalities. We are ready to fight tooth and nail to continue with the cross-subsidy system. It is the government’s decision,’’ said the advocate-general.

Ray added that out of 17 lakh consumers in the CESC area, more than 15 lakh are domestic. If cross-subsidy is abolished, these consumers will have pay much higher tariffs.

The CESC had filed a case before Calcutta High Court challenging the commission’s authority to fix power tariffs. A division bench had ruled in favour of the power utility but the Supreme Court reversed the verdict, saying the commission was authorised to do so.

“Though the apex court ruled in favour of the commission, it did not say whether it can direct the government to abolish the cross-subsidy provided by it,” said a judicial department official.

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