SIMA Chairman Dr. S.K. Sundararaman urges Tamil Nadu Chief Minister to reconsider the recent power tariff hike, citing its negative impact on the state's textile industry competitiveness and job market.
Coimbatore: The Southern India Mills' Association (SIMA) Chairman, Dr. S.K. Sundararaman, has appealed to the Tamil Nadu Chief Minister to withdraw the recent power tariff hike, which he claims is detrimental to the state's industrial sector, particularly the textile industry and MSMEs.
In a press release issued today, Dr. Sundararaman expressed concern over the Tamil Nadu Electricity Regulatory Commission's (TNERC) decision to increase the power tariff from Rs. 8.65 per unit to Rs. 9.09 per unit for HT consumers, marking a 4.83% hike. This increase, he argues, further erodes the competitiveness of Tamil Nadu's textile industry, which has been struggling due to various factors.
The SIMA Chairman highlighted that Tamil Nadu's textile industry, which once accounted for one-third of the country's textile business, has been losing its competitive edge since 2008. The constant increase in power tariffs, along with cross-subsidy surcharges and other charges, has made the power-intensive textile industry, especially the spinning sector, uncompetitive.
Dr. Sundararaman pointed out that Tamil Nadu's lack of raw material base forces the industry to depend on upcountry sources, incurring additional transportation costs of Rs. 5 to Rs. 7 per kg compared to raw material surplus states like Gujarat and Maharashtra. Moreover, these states offer substantial incentives for new investments in the textile industry, further challenging Tamil Nadu's position.
The press release also drew attention to the plight of the powerloom sector in Tamil Nadu. Unlike Maharashtra, which considers shuttleless looms as powerlooms and supplies power at concessional rates, Tamil Nadu levies regular tariffs, making its powerloom sector uncompetitive. Tamil Nadu has around 6 lakh powerlooms compared to Maharashtra's 12 lakh.
Dr. Sundararaman strongly criticized the linking of Consumer Price Index (CPI) to power tariff, stating that CPI is typically used for wage and salary adjustments, not for determining power generation costs. He warned that this approach could be counterproductive to the Chief Minister's efforts to attract large-scale investments to the state.
Given the industry's current struggles, including the closure of several spinning mills and large-scale powerlooms resulting in job losses, SIMA has requested a two-year moratorium on the power tariff hike. This period, they believe, would allow the industry to recover from the prolonged recession caused by the COVID-19 pandemic, the Ukraine-Russia war, and the Israel-Hamas conflict.
In a press release issued today, Dr. Sundararaman expressed concern over the Tamil Nadu Electricity Regulatory Commission's (TNERC) decision to increase the power tariff from Rs. 8.65 per unit to Rs. 9.09 per unit for HT consumers, marking a 4.83% hike. This increase, he argues, further erodes the competitiveness of Tamil Nadu's textile industry, which has been struggling due to various factors.
The SIMA Chairman highlighted that Tamil Nadu's textile industry, which once accounted for one-third of the country's textile business, has been losing its competitive edge since 2008. The constant increase in power tariffs, along with cross-subsidy surcharges and other charges, has made the power-intensive textile industry, especially the spinning sector, uncompetitive.
Dr. Sundararaman pointed out that Tamil Nadu's lack of raw material base forces the industry to depend on upcountry sources, incurring additional transportation costs of Rs. 5 to Rs. 7 per kg compared to raw material surplus states like Gujarat and Maharashtra. Moreover, these states offer substantial incentives for new investments in the textile industry, further challenging Tamil Nadu's position.
The press release also drew attention to the plight of the powerloom sector in Tamil Nadu. Unlike Maharashtra, which considers shuttleless looms as powerlooms and supplies power at concessional rates, Tamil Nadu levies regular tariffs, making its powerloom sector uncompetitive. Tamil Nadu has around 6 lakh powerlooms compared to Maharashtra's 12 lakh.
Dr. Sundararaman strongly criticized the linking of Consumer Price Index (CPI) to power tariff, stating that CPI is typically used for wage and salary adjustments, not for determining power generation costs. He warned that this approach could be counterproductive to the Chief Minister's efforts to attract large-scale investments to the state.
Given the industry's current struggles, including the closure of several spinning mills and large-scale powerlooms resulting in job losses, SIMA has requested a two-year moratorium on the power tariff hike. This period, they believe, would allow the industry to recover from the prolonged recession caused by the COVID-19 pandemic, the Ukraine-Russia war, and the Israel-Hamas conflict.