It is not the situation at hand but the future is what they are worried about, the industrialists say.
DH FILE PHOTO
The acute power shortage in the state has left the industrialists worried about the effect the crisis will have on production. Though the government has not officially announced load shedding, off late there have been a few unscheduled disruptions which the industry bodies termed as ‘unofficial load shedding’.
However, it is not the situation at hand but the future is what they are worried about, the industrialists said. “The future looks grim. Given the crisis the state is going through, we are worried that there could be disruptions. We, as consumers, will not be able to arrange for power supply at competitive rates if there is a severe crisis in the future. Hence, the government should get into talks with other states as well as private players to ensure there are no disruptions over the next few months,” said Ramesh Chandra Lahoti, president-elect, Federation of Karnataka Chambers of Commerce and Industry (FKCCI).
The situation seems to be a two-edged sword for the industries. On one hand, any disruptions in the power supply could affect production adversely, bringing down the profit margin. On the other hand, if the government purchases power from outside at a high cost to prevent disruption, it could levy higher fuel and power purchase cost adjustment (FPPCA) charges which would again be a burden on the industrialists.
“It is crucial that the government negotiates the prices well. Procuring power at higher prices will flow down to the industrialists and this in turn will bring down the profit margin. Not all industries can bear the brunt,” said Suresh N Sagar, governing council member, Karnataka Small Scale Industries Association (KASSIA).
Any reduction in profit margins could have a ripple effect on the business, explained Shiva Kumar R, president-elect, Peenya Industries Association.
“As the profit margins narrow, it gets difficult to pay GST on time. This will again lead to a penalty and in some cases, the GST might get blocked. This way, the material movement and manufacturing might have to be put on a halt,” Shiva Kumar said.
The industry bodies urged the government to take immediate measures so that they have a well-planned contingency plan for the next few months.