Tamil Nadu MSMEs Down Shutters Against Electricity Tariff Hikes; Pressure on DMK Govt

Chennai: Around 8 lakh micro, small and medium enterprises (MSME), dairy farms and rice mills affiliated to 19 unions remained shut on Monday. The strike was in support of the Tamil Nadu Industrial Electricity Consumers’ Federation’s (TNIECF) call for a state-wide lockdown to demand the cancellation of electricity tariff hikes and the networking charge system from solar panel companies.

MSMEs in Chennai’s Guindy, Ambattur industrial estates, Tirupur T-shirt manufacturers, Trichy, Salem, Coimbatore, Hosur and Cuddalore participated in the lockdown.

The federation announced that 80 lakh workers abstained from work and Rs 9,000 crores worth of production was stalled. Due to this, the Tamil Nadu government has incurred a loss of Rs 2,500 crore through electricity charges and tax revenue. In Coimbatore alone, more than 50,000 small businesses and entrepreneurs were shut, and production to the tune of Rs 1000 crore was affected.

The industrialists have warned the state that if their demands are not met, they will continue the protests. 

They further plan to wear black badges and submit petitions at Collectorates on October 9. If the tariff is still not reduced, they will hold a fasting protest in Chennai from October 16.

ELECTRICITY HIKE

The Tamil Nadu government hiked the electricity tariff on September 10, 2023. The standard fee for MSMEs was doubled to Rs 550. Similarly, the peak hour fare was hiked by 25%. 

More than 20 lakh MSME companies across Tamil Nadu have been significantly affected by this tariff hike. They continuously requested the DMK-led government to reduce the increased tariff.

Speaking at the protest in Guindy, Chennai K Chandrakumar, district coordinator of the MSME association, said, “Tamil Nadu is a pioneer in MSMEs. But these companies are facing a severe crisis due to the increased electricity charges. Despite several appeals to the government, no solution was found. Also, small and micro-enterprises are at risk of closure due to frequent electricity tariff hikes.”

DEMANDS ON ELECTRICITY

The protesting industrialists demanded the hiked electricity charges should be suspended for the next two years. They said the level tariff, which was raised to Rs 150 per kilowatt, should be reduced to Rs 35 per kilowatt. They also demanded to change from ‘3B’ tariff rate to ‘3A1’ tariff rate to get concessions up to certain units for small-scale industries.

These demands were not accepted by the Tamil Nadu government, so the one-day lockdown of MSMEs was called.

However, the Tamil Nadu government provided a modified proposal to lower charges for plants with variable loads according to seasonal demand and increase it when necessary to ultimately reduce the level charge. It also said a 15% capital subsidy will be provided for power lines to generate rooftop solar power. 

On Saturday, the state announced that for small and micro enterprises of less than 12 kilowatts, the change from ‘3B’ tariff rate to ‘3A1’ tariff rate would be considered after receiving the opinion of the commission.

The Industrial Electricity Consumers’ Federation did not accept the proposals and went ahead with the lockdown as planned.

On Tuesday, the state Minister for Rural, Cottage and Small Industries, T M Anbarasan, is set to hold talks with the representatives of MSMEs regarding the electricity tariff.