ibnlive » South » Andhra Pradesh

technology partner
in association with

Apr 23, 2013 at 02:50pm IST

AP: Power woes threaten survival of small and medium scale industries

Jeedimetla: Andhra Pradesh is reeling under its worst power crisis, and bearing the brunt of it are small and medium scale industries, which are losing 70 per cent of their revenues due to lack of electricity. Several industries are now standing on the brink of shutting down.

Once a bustling industrial town, Jeedimetla now wears a grim look. Andhra Pradesh's power crisis had brought small and medium scale industries to their knees. For several months, they have got just half the power supply they need. On the verge of a shutdown, almost 6000 small industries have been declared as non-performing assets.

Venkat Reddy, an industrialist, said, "Many small scale units are closing down. Production has fallen by 50 per cent with no power. Small industries don't have money for expensive gensets or expensive power." Factory owners complain that the price of power has doubled to Rs 6.25 per unit in the last 3 years. They also add that even at such a high cost, power supply is still unreliable.

For plastic manufacturing units, where 24 hour power supply is a must, industrialists are forced to buy extra power at Rs 10 per unit or more. Ravindra Babu, another industrialist, said that, "Forget growth, there is no power to even use our existing equipment. We incur heavy losses in wastage as power goes off midway and the entire process has to be repeated."

A fall-out of this power crisis is the fear of job loss. Workers in Jeedimetla have held steady jobs for several years. But for the first time, they fear that they might lose their long-held jobs. Gorango Maithi, a worker, used to send Rs 6,000 every month to his family in Kolkata. But now, he says, "We have never faced such power shortage before. With such a big shortage, it is difficult for us to find work. Where will workers like me earn money from now?"

Problems are mounting even for young entrepreneurs, who are not getting much needed bank loans due to power shortage. Banks are asking them how they will repay their loans without power supply. Ashok, an entrepreneur, said that, "All new projects or orders are being held back. Banks ask us how will we make our units work and repay loans without power."

While the Andhra Pradesh government is hoping for a good monsoon to tide over the power crisis, businessmen are blaming the administration. Sadashiva Reddy, President of Jeedimetla Industrial Association, said, "The industry is in a critical state. We built it for the last 30 years and it is sad to see that it may all collapse if things don't improve in the next 6 months."

Andhra Pradesh is home to more than a lakh small and medium scale industries. But the unprecedented power crisis is threatening their very survival. Adequate power is a mirage for most factories, even as the government asks them to be patient. Industrialists are concerned whether they would even survive to see the end to this power crisis.