The lingering uncertainty over the Telangana issue is gradually, but surely, impacting the economic activity in this region of Andhra Pradesh. The month-long general strike by pro-Telangana activists has deeply affected almost every facet of the industrial and economic sectors with the State Government and most corporate houses suffering from significant financial haemorrhage.
While the Federation of the Andhra Pradesh Commerce and Industry (FAPCI) has pegged the losses at over Rs 3,000 crore in the first 15 days, Assocham has estimated the losses to the State's trade, industry and financial sectors at over Rs 10,000 crore. The loss for the small and medium enterprises, small traders, the lucrative entertainment industry and large number of small industries is also expected to be on the higher side.
The State Road Transport Corporation has lost 150 crore.
Power
The key to the losses is the power crisis that hit the State. This was triggered by acute coal shortage, with production at Singareni Collieries Co Ltd (SCCL), which supplies coal to major power plants in the State, crippled since September 13. Between September 13 and October 10, the coal miner produced about 12 lakh tonnes, as against the normal target of about 40 lakh tonnes. “In financial terms, the revenue loss during this period works out to over Rs 500 crore, in addition to Rs 141 crore wages lost,” a senior SCCL official said.
Coal shortage in turn hit power production at NTPC's Ramagundam plant, apart from power units of APGenco and other private producers. Generation has been affected to an extent of 780 MW from NTPC's Ramagundam unit and 220 MW from the Simhadri station.
Pharma
This has had a cascading effect on other industrial sectors. The pharma industry, for instance, is struggling hard to maintain export schedules. Hyderabad is seen as the bulk drugs capital of India, accounting for 15 per cent of the country's total bulk drugs exports. “The power supply is being provided for only three days a week. This is forcing the industry to maintain operations through diesel generators,” Mr Bhaskara Narayana, Chief Financial Officer, Natco Pharma Ltd said. The cost of production during the last 25 days has gone up almost by three times, say industry sources.
While the power tariffs were Rs 3.99 a unit for Govt-supplied power, power generated through diesel is now costing the pharma compaines Rs 14.5 per unit.
Cement
Cement is another sector that has been badly hit. Telangana being rich in limestone deposits, also has the maximum number of cement units. Cement manufacturers are now forced to import coal, which is 30 per cent costlier. And, like other sectors, they are depending heavily on diesel power generation, which is adding to the production cost. “In addition, there are also distribution and supply chain problems,” Ms S V S Shetty, Chief Executive Officer, Anjani Portland Cement Ltd said. As a result, the consumption in the State had dipped to 13 lakh tonnes in September compared to about 15 lakh tonnes in the previous month, according to industry data.