25% MSMEs in North India on verge of closure: ASSOCHAM

July 22, 2014 1:45 pm

Due to unprecedented power crisis in northern India, over 25 per cent micro, small and medium enterprises have come to the verge of closure due to their inability to use diesel-based power generation, according to information received by apex industry body ASSOCHAM.
“The worst affected states are Punjab, UP, Haryana, Rajasthan and Delhi,   thereby threatening the livelihoods of thousands of workers,” said D.S. Rawat, Secretary General of ASSOCHAM while stating his observations.
In its survey released last week, ASSOCHAM had stated that the industrial production is likely to fall by 40 per cent due to frequent power outages in the aforesaid regions that are also coping with severe heat wave.
Due to extreme power deficit, industrial production in states of Uttar Pradesh, Andhra Pradesh, J&K, Haryana, Punjab, Rajasthan, Karnataka, Tamil Nadu, Maharashtra would have to be curtailed to the extent of 30-35 per cent particularly in manufacturing units as these have no alternative means to produce power, according to ASSOCHAM.
The feedback received by ASSOCHAM is based on the latest power situation in leading states that have concentration of industrial presence at substantial level discloses that in states such as Uttar Pradesh Madhya Pradesh, Maharashtra, and J&K energy deficits which was around 20-25 per cent in April-May would go beyond 30-35 per cent in June –July, further noted ASSOCHAM.
Uttar Pradesh and Andhra Pradesh are two states in which power cuts exceed 10-12 hours a day and face the worst energy crisis which will further deepen in the absence of corrective measures and therefore industrial locations in these two states would have to curtail their industrial production to the extent of 45 per cent, said Mr Rawat.
Uttar Pradesh, which is one of the industrialised states in the country is facing one of the worst crises with energy deficit touching about 11.2 per cent, facing energy deficit of over 924 Million Units (MU). The state of Uttar Pradesh as per feedback given to ASSOCHAM by its constituents is resorting to an average load shedding of 10-12 hours a day.
The state of Uttar Pradesh, which has a power requirement of over 8,282 MU, has availability of little over 7,358 MU with deficit ranging over 11.2 per cent. The situation is no better in Andhra Pradesh where the power deficit is approximately 12.1 per cent. The availability in the state is only 7,976 MU against the requirement of 9,070 MU. The Southern part of the country is likely to suffer energy shortage to the extent of 2,111 MU particularly in Andhra, Karnataka and Tamil Nadu.
Jammu & Kashmir suffered a power shortage of 20.3 per cent in April which will go around 25 per cent and the gap between power availability and supplies would be around 1000 MU.
Maharashtra has a potential to generate 5,000 MW of electricity through wind energy and another 1500 MW by way of bagasse cogeneration. With the use of non-conventional resources of energy, these regions can become a power surplus state in few years.
Demand side management and also transfer of surplus power from the captive units to the state grids were few other suggestions cited to fight power shortages in short run.
According to the chamber power theft, leakages and transmission and commercial losses were the main reason for power deficit in these states. Use of non-conventional sources of energy especially for domestic usage and street lightning, is another short-term solution recommended by opinion leaders.
Mr Rawat further said that since a few new capacities are emerging in power sector and T&D losses remain untamed to the extent of 50-55 per cent in most of leading states, the power situation is unlikely to be better in next few months even though mercury levels will fall significantly.
ASSOCHAM Secretary General also added that lack of fresh investment and modernisation coupled with huge transmission losses are responsible for the grave power situation in the country which will continue.