Icra: Average tariff hike in FY15 a paltry 6% in 75% of states

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Published: December 17, 2014 2:06:39 AM

Despite government plans to gradually increase electricity tariff across India — part of the plan to restructure...

Despite government plans to gradually increase electricity tariff across India — part of the plan to restructure the deteriorated finances of state electricity boards — it was observed that average tariff hike in fiscal 2015 was a paltry 6% in 75% of the states, according to a report issued by credit rating agency Icra. The firm said on Tuesday that 22 of the 29 states have issued tariff orders for fiscal 2015 till date. The hike in tariff in fiscal 2015 is lower than the median increase of 7% approved for fiscal 2014 while it had touched 14% in the financial year ending March 2013.

“The tariff order for distribution utilities in Rajasthan is yet to be issued and this coupled with delays observed in issue of tariff order in Tamil Nadu (wherein utilities in both states have implemented financial restructuring scheme) is a major deviation from the conditions that were an integral part of the restructuring,” Icra said. The report touched upon the impact due to fuel shortage witnessed by thermal plants in India.

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