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Power, subsidised rice may cost more in Andhra Pradesh

Syed Amin Jafri in Hyderabad

Power tariff and subsidised rice prices are likely to rise in Andhra Pradesh soon.

The state cabinet has decided to allow the Transmission Corporation of Andhra Pradesh, or AP Transco, to submit proposals for power tariff hike to the AP Electricity Regulatory Commission.

Once the APERC decides on the proposals, a tariff revision would be effected. The process may take a couple of months. The hike in power tariff would hit about 10 million consumers.

Briefing newsmen after the cabinet meeting, state Finance Minister Y Ramakrishnudu, state Home Minister T Devender Goud, state Power Minister K Subbarayadu, and state Civil Supplies Minister N Janardhan Reddy said that the cabinet also decided to effect a hike in the price of subsidised rice.

The proposed increase in rice prices will burden 11.3 million poor families. This rice is sold to the poor through the public distribution system, or PDS, at Rs 3.50 a kg.

However, the new price of rice would be decided at the next cabinet meeting.

Devender Goud said that AP Transco has indicated a shortfall of Rs 36 billion in the financial year 2000-2001. AP Transco has also sought assistance from state government for power supply to agricultural and domestic consumers at subsidised rates.

The alternative proposals for tariff revision envisage hikes ranging from 18 per cent to 60 per cent.

"The cabinet told AP Transco officials to improve its efficiency and effect savings of Rs 5-6 billion by containing transmission or distribution losses. The remaining Rs 30-31 billion would have to be raised from other sources like tariff hike and reduction in government subsidy," he added.

"We have discussed various options in view of the heavy burden on the state exchequer and the state's precarious financial position," he said.

Since 1997, the central government has thrice increased the issue price of rice for PDS. With the hike effected by the central government recently, the subsidy burden on the rice scheme in the state has gone up to Rs 15.26 billion.

The state would have to shell out Rs 4 billion more if the subsidised rice price is retained at Rs 3.50 a kg.

"We have been compelled to increase the price of subsidised rice. We need 2.3 million tonnes of rice for distribution under PDS. If the price is increased to Rs 5.50 a kg, the financial burden on the state government will drop to Rs 10.66 billion," he said.

Business

Andhra Pradesh