The Confederation of Indian Industry (CII) on Friday urged the Punjab Government to review its decision to levy infrastructure development (ID) fee on power and fuel as the move will ‘hamper’ the prospects of attracting new industrial investments in the State. Besides, the ID fee will also make the existing industry uncompetitive in the State as its input cost will go up considerably, said the industry body.
“This fee and cess has indeed taken the whole of Punjab industry by surprise. As energy costs happens to be a major component of any trade and manufacturing activity, this State Government's decision will certainly impact the overall competitiveness of industry-based in Punjab…In addition, it would also hamper Punjab's plans to attract new investments in State,” said CII Punjab Public Policy and Advocacy Panel convener and Vardhman Textiles limited director Dl Sharma.
CII Punjab State Council chairman and Managing Partner of ludhiana-based Bhogal Sales Corporation SS Bhogal said: “The intent of the State Government to upgrade State's infrastructure is certainly good, however, this decision of five per cent ID fee on power tariff coupled with existing 13 per cent duty on power and Rs1 cess on petrol and diesel will slow down energy intensive industry in the State and make the Punjab industry in competitive vis-à-vis neighbouring States.”
CII, in its statement, also appealed to the State Government to have a relook at its policy of cross subsidising the power being supplied to farm sector. It has suggested the State Government to consider rationalising power supply to the agriculture sector whereby it can allot a particular number of free units of power to farmers based on the crop need he is cultivating.
“If the farmer is able to irrigate the fields within his fixed quota, he should be able to redeem the balance units for cash, whereas if the farmer overshoots his quota, then he should be charged for the number of exceeded units he has consumed,” it added. CII experts said that the current policy of cross subsiding the farm sector at the expense of other key sectors including industry and trade is “not economically sustainable” and, therefore, the State is facing a huge fiscal and revenue deficit, which is having an overbearing impact on socio-economic growth of the State.