Coimbatore: Cottage and micro enterprises in Tamil Nadu have expressed frustration over the non-implementation of a government order issued three years ago that was meant to shift eligible tiny and cottage units to the concessional LT-3A(1) electricity tariff. Despite the order, these units continue to pay higher charges under the LT-3B category, according to industry representatives.
Background of the Issue
James, district president of the Tamil Nadu Association of Cottage and Micro Enterprises, highlighted that Coimbatore alone houses around 20,000 cottage and micro units that largely depend on job-work orders. These units cater to sectors such as automobile components, textiles, and defence supplies, and operate on thin margins reliant on steady outsourcing contracts.
As per eligibility norms, cottage and micro enterprises with a connected load below 12kW could be brought under the LT-3A(1) category. However, entrepreneurs claim that field officials continue to provide and retain connections under LT-3B, resulting in higher per-unit tariffs and additional peak-hour charges.
Tariff Disparity
Under LT-3B, the tariff works out to approximately Rs 7.65 per unit, while it is around Rs 4.65 per unit under LT-3A(1), with no peak-hour levy. Despite meeting the criteria, many units have been denied migration to the lower tariff, leading to what the association terms a systematic denial of a benefit intended for small manufacturers.
After sustained protests, the state government issued an order in 2023 to convert nearly 2.70 lakh connections with loads below 12kW to LT-3A(1). Yet, the conversion has not been implemented on the ground.
Subsidy Not Reaching Beneficiaries
The association pointed out that the state is offering an annual subsidy of about Rs 10 crore to facilitate such conversions, but the benefit has not reached the intended users. The association urged the government to issue fresh directions to ensure that the subsidy received over the past three years is passed on to eligible consumers.
Case Study: Impact on a Small Manufacturer
G. Prathapsekar, of Vellandipalayam, who has been manufacturing pump set spare parts on a job-work basis for 28 years, said he is paying around Rs 8,000 per month on electricity bills, including fixed charges of Rs 1,950, meter-related charges of Rs 1,700, and energy charges of Rs 4,200 to Rs 4,700. Despite using less than 12kW and repeatedly seeking conversion to LT-3A(1) for two years, no action has been taken. Additional charges linked to power-related components have added to the burden, and he warned that electricity costs are pushing small units into losses.
