Millowners body knocks MERC on subsidy for composite textile units

Sanjay Jog

Mumbai, Oct 14: The Mumbai-based Millowners’ Association (MoA), a representative body of 32 ailing textile mills, has appealed to the Maharashtra Electricity Regulatory Commission (Merc) that the same subsidy rate given to nearly eight lakh powerlooms be applied to 36,104 looms in the composite textile mills across the state.

The MoA has insisted that the same tariff be applicable to composite mills, especially when the state government has agreed to subsidise the powerloom sector through a grant from the consolidated fund.

The MoA in its affidavit before the MERC on the Maharashtra State Electricity Board’s (MSEB) tariff proposal for 2001-02 has said that the tariff actually payable by eight lakh powerlooms cannot be denied to an handful looms in the composite mill sector as the subsidy would not exceed by more than 4 to 5 per cent. The association, whose affidavit would be heard during the public hearing slated next week by MERC, has said that though powerlooms would continue to get power at highly subsidised rate, the composite mills cannot face a cost difference of 8 per cent. “In the case of composite mills, power accounts for about 16 per cent of cost of production. A minimum difference of Rs 1.91 per unit makes a difference of 52 per cent in the cost of power and 8-8.5 per cent in the cost of production,” the association added.

According to the association, the MSEB has proposed to merge the metered powerloom category into LTP-G. The tariff for unmetered powerloom consumers has been proposed as Rs 850 per KW per month. To compare the powerlooms tariff with the tariff applicable to composite mills, it was necessary to work out the incidence of duty of per unit basis.

The MoA said that the MSEB’s assumption of 182 units was based on the assumed working of 12 hours only. However, powerlooms work 2 shifts of 12 hours each. “When power is available free of charge in the second shift, it is unbelievable that any powerloom unit would keep its looms closed in that tariff. Hence it is correct to assume consumption of 364 units, which means the incidence of metered supply of Rs 2.20 per unit and of unmetered supply is Rs 1.74 per unit as against the incidence of duty of Rs 365 plus fuel cost adjustment paid by the composite mills, which also manufacture fabrics exactly like powerlooms,” the Association added. The Association wants MSEB’s 100 per cent metering programme should be completed in a time bound manner. Further, the cooperative spinning mills should be applied similar tariff prescribed for the composite mills and the state government may give subsidy to cooperative mills “as may be deemed fit,” it added.