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Incentives to lure states to power ordinance

The Union government has announced an annual incentive package of Rs 2 billion to lure states to into accepting the controversial ordinance on Power Tariff Regulation Commissions.

Union Minister P R Kumaramangalam, who made the announcement to the media in Madras on Sunday, also said the supply of free power would not be stopped. "It would be completely up to the state to decide what level of tariff or subsidy to offer the farming sector, he said.

The minister added that any state which notified the state electricity regulatory commission could avail of cheap Central loans while the three per cent rate of return payment for its electricity board will be waived.

Kumaramangalam said the Power Finance Corporation would reduce its lending rate by one per cent, while the Rural Electrification Corporation would reduce its interest rate from 14 per cent to nine.

He stated that a bill would be passed in Parliament making it mandatory for industries to obtain certification of energy efficiency or pay a cess to the Centre. This was being done to conserve energy and reform the private sector.

The minister said he planned to meet the leaders of various political parties to clear up their misgivings. He also referred to certain doubts raised by Jayalalitha and said that he had invited suggestions from the coalition partners of the Bharatiya Janata Party. "Till now, I have not received any representation," he said.

He pointed out that the power regulatory bill was initially introduced in 1997 and a Parliamentary committee at that stage wanted the states to be consulted.