India Inc has termed the government's decision to
allow power producers to pass on higher cost of imported coal to consumers a step in the right direction.
The move, industry leaders say, would increase the
availability of power in the country.
Finance Minister P Chidambaram on Friday said the Cabinet Committee on Economic Affairs (CCEA) has approved the pass through proposal, which would result increase in power tariffs for consumers.
Under the mechanism, the entire additional cost of imports would be passed on to the consumers against the averaging of prices of imported and domestic coal under the earlier planned price-pooling process.
"It is a step in a right direction as it will help to mitigate the problem of coal shortage. It will also make the unviable power projects viable and will help in boosting infrastructure and industrial growth of the country," Former Ficci President R V Kanoria said.
However, Kanoria said that the government should not encourage re-negotiation of contracts. "It is not a good thing to do," he said.
Sharing similar views, Assocham Secretary General D S Rawat said there was a huge power shortage in the country and about 30,000 MW of stalled capacity is idle due to coal shortage.
"We welcome the Cabinet's decision in this regard," Rawat said.
The pass through mechanism will be applicable for nearly 78,000 MW of thermal stations commissioned after 2009.
Electricity tariff across the country will increase by a minimum 15 to 17 paise per unit after the government's decision.
with inputs from PTI 
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