HIKE IN ELECTRICITY TARIFFS

We are not sure if you are worried about electricity bills in your home. But there is a hike in the electricity tariff of which people are concerned about knowing what the reason behind. A family that was getting a bill of 600/- per month is now getting 2000/- for the same electricity usage. We will take you to the reasons and basics in this article.

Prior to going into the topic, let us know some basics of electric charges, slabs, types of consumers.

Electricity in India is provided by the Government of India (GOI). Electricity is a concurrent (state & central) subject by the Indian constitution.

One Indian unit of electricity is one kilowatt-hour (kWh). In a simple take, one unit is said to be consumed when you use a 1000watt appliance for 1 hour.

Who are consumers?

Everyone who consumes electricity is a consumer but, the government has categorized consumers based on types of usages. The three types of electricity consumers are:

• Domestic
• Commercial
• Industrial

The cost per unit of electricity of commercial and industrial consumers is a little high because they make profits by its usage.

Like how consumers are categorized on types of usages, slabs are meant to divide consumers based on the quantity of usage. In another way, the slab is just a line that divides consumers.

E.g. Charges for 100 units of consumption will be less than that of 700 units of consumption.

What is the necessity of categorizing consumers and dividing slabs?

GOI provides subsidies on electricity. Since it cannot provide subsidy for everyone, they classified consumers on a certain basis. Also, GOI charges consumers based on their usage quantity for which slabs are used.

What is the necessity of categorizing consumers and dividing slabs?

As it is mentioned above, it is the subject of both state and central, there are several companies in India maintained by state and central governments. Electricity tariff is never the same in all states of India; it may differ from state to state.

A shirt price in-store ‘X’ is not meant to be the same in-store ‘Y’ because it is manufactured by different companies at a different cost price.

In the same way, each state produces electricity at different cost prices. Because one may produce from water others may produce from coal or in many other ways, at different labor charges. That is why they differ.

India is said to have electricity in abundance. What made the government to increase tariffs?

We indeed have electricity in abundance but, there is an upsurge of the price for DISCOM’s (Distribution companies) inputs (Raw materials for generating electricity). Companies are in debt and there are instances where they are taking loans to pay salaries of their employees. Debts also made DISCOM’s to fire their employees. So employee unions demanded the government to hike tariffs to compensate for the loss.

There may be another reason, as the government is providing electricity for subsidy prices, and some state governments even provide free electricity for agriculture. To compensate fiscal (tax) debts they might have increased tariffs.

Why there is a hike in prices now?

As mentioned above, the power usage is divided into slabs. For example, consider these power slabs

• 0-50 units        –           Rs.1.45/unit
• 51-100 units    –            Rs.2.6/unit
• 101-200 units  –            Rs.4.3/unit
• 201-300 units  –            Rs.7.2/unit
• 301-400 units  –            Rs.8.5/unit
• 401-800 units  –            Rs.9/unt

Consider the above slabs. The bill gets divided into slabs For consumption of 250 units of power, the bill we get is 50*1.45 = 72.5 (for 1st 50 units), 50*2.6=130(2nd 50 units), 100*4.3=430 (for 3rd 100 units), 50*7.2=360 (balance in the next slab), Total we get is 992.5 + service charge.

As far as Telugu speaking states are concerned, domestic consumers are said to be affected less than that of commercial and industrial consumers.

There is a misconception of citizens that, the hike is due to the COVID-19 epidemic. But the scene behind the show is that tariffs were revised well before and only came into effect from April 1.

Since, MSME (Micro, small and medium enterprises) have been shut down for 40 days, tariff hike may have an impact on them.

Note: We had included almost every basic of electricity tariff not by underestimating you or to bore you. Our idea is to help someone who lacks knowledge in it.

-SHIVA SAI BANDARI

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