The Telegraph
Since 1st March, 1999
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Jaya offers cash for power Jayalalithaa: Give & take

Chennai, March 15: The Tamil Nadu Electricity Regulatory Commission today scrapped the scheme providing free power to farmers in the state for 13 years and imposed a minimum tariff on supply to agricultural pumpsets and huts, sending the political temperatures soaring.

In a quicksilver move to cool tempers, chief minister Jayalalithaa said the move was legally inevitable and announced direct “cash support” to small and marginal farmers to meet the new expense.

Tamil Nadu is the only state in the country with a huge power subsidy after Punjab recently revoked a similar scheme. The benefit was provided to only small and marginal farmers by an earlier ADMK government headed by the late MGR in 1984, but was extended to all farmers by the DMK in 1990.

The power subsidy burden was becoming unbearable for a cash-strapped administration, but there was no political resolve to tackle the touchy issue. The Jayalalithaa regime did not want a political hot potato on its hands though the World Bank and other lending agencies were pressuring the state to reintroduce a minimum power tariff for the farm sector.

When the Tamil Nadu Electricity Board moved the regulatory commission seeking re-imposition of a minimum tariff, the government did not agree and passed the buck to the regulator. The new tariff will come into effect from tomorrow, said the regulatory commission spokesman R. Balasubramanian. Farmers can choose between a flat rate of Rs 250 per horse power (hp) per annum or 20 paise per unit if they opted for meters. The electricity board had sought a rate of Rs 600 per HP per year or 50 paise per unit of energy consumed.

Huts, which were till now provided free power, will have to pay a monthly minimum of Rs 10 per hut or 50 paise per unit. For both the agricultural and hut services, the billing would be done once in six months. The first bill will be due in September.

While rationalising the slabs for high tension and low tension electricity consumers by doing away with differential power pricing in metro and non-metro areas under both categories, the electricity regulator slapped a steep hike of 22.13 per cent — the maximum — on domestic households. For commercial establishments, the hike is 20 per cent in the low-tension segment, but a modest 7 per cent for high-tension industrial consumers.

The commission has spared places of worship and powerlooms, the spokesman said. The electricity board had asked for bridging a revenue deficit of Rs 2,743 crore for 2003-04, but the regulator pegged the deficit lower at Rs 1,399 crore and, accordingly, proposed the tariff revision to raise additional revenues, he added.

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