Current estimates indicate that to support 22 lakh agricultural consumers, the three users may need to fork out at least Re 1 extra for each unit being consumed at present. This would make Maharashtra the most expensive state for buying electricity.

To quote a report of the Comptroller and Auditor General: "The current high tension industrial tariff in Maharashtra is already one of the highest if not the highest in the country. Further steep increase in this tariff will encourage industry to go in for captive power generation. This will substantially reduce the scope for crosssubsidisation and will have serious long term implications for the financial viability of the MSEB."

The CAG report further adds, "it is also necessary to emphasise that Maharashtra is no longer the most attractive or sought after location for new industrial investment and ventures in the country. Very high power tariff for commercial users is thus also a positive disincentive to the faster growth of this more dynamic service sector of the economy in Maharashtra."

According to top sources, the cash-starved MSEB will write to the chief minister Manohar Joshi to provide support of at least Rs 1,000 crore to fulfill Thackeray's directives. There has been a substantial fall in the budgetary support from Rs 1,400 crore in 1994-95 to just Rs 200 crore in 1998-99. Moreover, the subsidy extended to agriculture, now Rs 2,200 crore a year, will increase by another Rs 1,000 crore if the government supplies free electricity to agricultural consumers.

During 1991-92 to 1995-96, subsidisation of the agriculturalsector, which was Rs 6,824.16 crore was largely (92.09 per cent) at the expense of high- tension industrial consumers. A recent study indicated that in the absence of pumpsets, 80 per cent of farmers were not able to avail themselves of the benefit of low agricultural tariff. Only 2 per cent, who were members of large lift-irrigation schemes, were the main beneficiaries.

The heavy subsidy to agriculture at the cost of high-tension industrial consumers has rendered the tariff for the industrial users being much higher that the all-India average. The average realisation per unit was Rs 2.85 in 1995-96, compared with the national average of Rs 1.67.

The CAG report has, in fact, called for urgent rationalisation of tariff, metering of all supplies to the agriculture sector, ensuring prompt repair/replacement of faulty meters, prompt disconnection of power supply for non-payment of dues and effective follow-up of legal action.

MSEB, which recently hiked its tariff by 4 to 8 per cent from September 1 thisyear, hopes to generate an additional Rs 1,000 crore within a year. At an increase of Re 1 per unit for residential, industrial and commercial consumers, the board may not maintain the 4.5 per cent rate of return (RoR) as expected by the Central Electricity Act, following which it might lose its license to operate.

MSEB's inability to bring down the receivables to the prescribed norm of 2.5 months revenue even after writing off Rs 806.94 crore during the last five years up to 1996-97 led to the suspension of the World Bank loan of Rs 900 crore in October 1996. Arrears as on March 1997 stood at Rs 2,724.91 crore, of which 69 per cent was attributed by MSEB to restrictions imposed by the state government on disconnection of power supply to defaulting consumers.

More than 50 per cent of domestic consumers and about 75 per cent of commercial consumers were billed on average/minimum basis. MSEB suffered a loss of Rs 48.49 crore on account of minimum billing during June 1997.