The Kanara Chamber of Commerce and Industry (KCCI) has urged the Karnataka Government to reject the order of the Karnataka Electricity Regulatory Commission (KERC) to increase power tariff across all electricity supply companies (Escoms).
In a memorandum to the Karnataka Chief Minister, Basavaraj Bommai, and the Karnataka Power Minister, V Sunil Kumar, the President of KCCI, M Ganesh Kamath, said MSME sector will completely collapse if the power tariff is hiked again.
He said KERC has proposed to increase power tariff towards the Fuel Cost Adjustment Charges (FAC) by 43 paise per unit across Escoms with effect from October 1.
MSME sector in India is the second largest employment generator after agriculture and acts as a breeding ground for entrepreneurs and innovators with considerable support in strengthening the business ecosystem.
However, Covid-19 and lockdowns impacted the cash cycles of MSMEs, leading to severe disruptions, he said, adding, MSMEs are facing challenges related to debt repayments, wages and salaries, statutory dues, etc., post-lockdown.
It is not only the MSME units that faced challenges, even consumers are left with lower disposable income. Many enterprises laid off their workers because of the inability to pay salaries, vacated their offices due to incurring expenses, and halted their production due to lack of demand, he said.
The memorandum said: “We wish to inform you that the MSME sector will completely collapse if the power tariff is hiked again. This is the third time this year that the KERC has hiked electricity charges. In April, it hiked 35 paise per unit on an average, and 25-30 paise per unit in June. We, therefore, request you to kindly reject the KERC proposal to increase power tariff again and save the small scale industries from collapse.”