Nagpur: Much to the relief of industries in the backward regions of Vidarbha, Marathwada and Northern Maharashtra, the State Government has decided to extend the scheme of providing power subsidy to aid them in remaining competitive in the cut throat competition.
On Tuesday, the State Government issued a GR notifying that the subsidy for industries in these two regions is being extended till 2026-27. The other contours of the scheme remain unchanged as the subsidy component is going to be Rs 1,200 crore annually. There is no other change in the calculation of subsidy elements for the industries.
The notification by the Department of Industry, Power and Labour came days after Deputy Chief Minister Devendra Fadnavis had hinted at announcement about the power subsidy scheme while speaking at an event of signing of a MoU for setting-up a distillery in Butibori. Since then, industry captains were waiting for the signals about the subsidy.
In fact, Maharashtra Government was facing legal challenge after it discontinued the power subsidy scheme midway after Maha Vikas Aghadi (MVA) coalition was ruling in the State. The reason was the total subsidy of Rs 1,200 crore was utilised within a few months while it was supposed to last for the entire year. Detailed inquiries later revealed that the scheme was misused by some of the steel industries in Northern Maharashtra region that cornered major portion of the subsidy, allegedly in connivance with officials of Maharashtra State Electricity Distribution Company Limited (MSEDCL).
Earlier, Vidarbha Industries Association (VIA) had dragged Maharashtra Government to Court, upset at abrupt withdrawal of the subsidy scheme. VIA had given suggestion as to capping individual subsidy to industry to prevent its misuse. The industries here contended that they had invested heavily in capacity upgradation at their plants considering the calculation of subsidy. Hence, the mid-term withdrawal of subsidy would put them in financial stress and hence prayed for direction from Court to continue with the power subsidy till the defined period.
Now, taking into view the need for support to industries in Vidarbha and Marathwada, the subsidy scheme is further extended as the Government is of view that the same would help in attracting investment in these areas. However, the GR left scope for amendment in the scheme saying current notified norms would continue to apply till Cabinet Sub-Committee suggests any reforms. Till then the applicability of rules notified in GR of June 23, 2022, would remain in force.
Compared to Rest of Maharashtra, the penetration of industries in these three regions is quite poor and hence it was decided by the Government to provide power subsidy as the same will attract investment. The industries in D and D+ category would be eligible for power subsidy. Now, MSEDCL is likely to carefully monitor applicability of subsidy ensuring that the allocated fund lasts for the entire year. So any extra large claim from any single industry is likely to be red flagged at the initial stage itself to avoid any problems at later stage, said the officials.
