Multiple problems related to the supply of power are adversely impacting both the bottomlines and productivity of small and medium enterprises (SMEs) in India. A Confederation of Indian Industry (CII) study reveals that the Indian economy is losing 1.5 per cent of GDP due to power supply problems every year.

According to the study, the power supply is highly erratic and bulk consumers (high load users) do not get information on expected supply patterns. This results in heavy loss of production and deterioration of machines used by SMEs, due to sudden shutdowns and spikes in the supply voltage.

Unscheduled power cuts and irregular supply affect the full working of SME units to a great extent. A supply shortage of one unit of electricity results in a loss of output to the economy of between Rs 15-25. According to SME owners, there is a constant problem of dip in supply voltage.

For instance, high tension (HT) supplies dip to 9 kv in place of 11 kv causing a drop in the supply voltage to shop floors. In such cases, the supply to the shop dips to 350-380 volts, disturbing the production process and necessitating disconnection of State Electricity Board (SEB) supplies and a shift to diesel generators. There is no accountability at any level for the State Electricity Boards. Power problems also vary from region to region. For instance, the CII survey reveals, SMEs in the North-East region are officially allotted power for 25 days a month but actually receive supplies only for about 16-18 days. Further, at Rs 4.65 per unit, power costs in the North-East are among the highest. The Board charges a fixed flat charge over and above the unit charge, irrespective of consumption, which adds to the cost of power.

... contd.