Maharashtra, Goa woo industries from Karnataka’s border areas as anger builds up over hike in power tariff

On Thursday, about 10 districts in the Kittur-Karnataka and Kalyan-Karnataka regions observed a day’s bandh, after chief minister Siddaramaiah ruled out any relief in power tariffs.

Belgaum Chamber of Commerce & Industry president Hemendra Porwal said officials from the neighbouring states were in touch with them and offered better subsidies than in Karnataka if they wished to invest in their state.

The recent hike in power tariffs has pinched industries so hard that they may not have no option but to explore options across the border, Porwal said. “Belgavi is second to Bengaluru in terms of exports from the state. We compete with Kolhapur and Pune. Right now, those regions have the upper hand because of power subsidies.”

Officials in Maharashtra and Goa could not be reached for comment.

An electricity supply company official put the average annual hike in power tariff for industries at 8.31%, excluding fuel and power purchase cost adjustment. Industries claimed the hike was 25-30%, including cost adjustments.The power tariff hike is seen as a means to fund the new Congress government’s promise to supply up to 200 units a month of electricity free of cost to households.Aravind Melligeri, whose company Aequs operates manufacturing clusters in Belagavi, Dharwad and Koppal districts, said subsidies to farmers and other schemes cannot come from the industry. “The government needs to pay from its own funds. Industry sufficiently contributes by way of taxes and jobs,” he said.

Investors find Maharashtra friendlier because of its generous support to industrial units, said Sachin Sabnis, president at the state unit of RSS-affiliated Laghu Udyog Bharati.

The latest bout of protests may come as a setback to Karnataka’s efforts to push investors to consider places beyond the capital to invest in.

While Bengaluru and surrounding districts did not participate in Thursday’s shutdown, about 40 industry associations in the erstwhile Hyderabad-Karnataka and Mumbai-Karnataka regions shuttered their units for a day.

A manufacturing sector veteran, while not willing to be named, said existing units may not shift operations to another location since it would be difficult, but they may consider sites across the border for further expansion.

Sandeep Bidsira, president at the Hubli Chamber of Commerce, also made similar views. “Hubli mostly has small manufacturing units. It is not as easy for us to move as it would be for an industry in Belgaum.”

Karnataka industries minister MB Patil blamed the previous BJP regime for the tariff hike, while offering to discuss industry’s demand with the CM.

Former CM Basavaraj Bommai put the blame on the new Congress regime, saying it was for the first-time industrial units shut their activities to protest a government policy. HD Kumaraswamy, another former CM, after hearing out representatives from the electronics and software industries in Bengaluru, urged the government to cut electricity taxes.