By: Devinder K.Sharma

Devinder K.Sharma — Wed, 19 Aug 2009 19:04:07 +0000

This is a progressive measure on several counts. First, it obviates the need to come to the Legislature time and again for revision of electricity duty. Secondly, it imparts automatic buoyancy in electricity duty revenues to the State as the prices of power move upwards. Last but not the least is the ease of implementation. Calculation of ad valorem electricity duty is easier than the earlier method. There are, however, a few concerns which could have been addressed in regard to moderating the electricity duty for the power connections to serve the State run drinking water supply, institutional buildings like hospitals, educational institutions, street lightingin urban areas and irrigation projects. These entities have huge arrears to be paid for the power consumption. They do not have wherewithal to do so because the government will not let them determine the economic price of service provision. They also do not have adequate budget provisions for payment of the power dues and internal maintenance of the power supply system. In these cases, the duty levy for such institutions could easily have been tied down to the domestic consumption to give them some breathing space. This does not alter the revenue accrual picture to the State because such consumption is a small fraction of the total consumption, the industrial and domestic being the major ones accounting for nearly 4/5th of the total consumption. The other concern relates to the issue of a special surcharge which was permitted by the State Government in the local government legislation. The concern is two fold : one that whether the previous levy by the local bodies is impacted by the new legislation in any manner, and second that it could have been more prudent to merge such surcharge into the duty structure so as to provide for long term buoyancy for the revenue on this count to the local bodies.

Comments on: New Himachal Electricity Duty Bill passed

By: Devinder K.Sharma