MP Industries Raise Alarm Over 4.8% Power Tariff Hike, Seek VAT Relief

(MENAFN- KNN India) Bhopal, Mar 28 (KNN) Industrial units across key manufacturing hubs in Madhya Pradesh have raised concerns over the recent electricity tariff hike approved by the Madhya Pradesh Electricity Regulatory Commission (MPERC), stating that it could significantly increase operational costs amid already challenging market conditions.

The commission has approved an average increase of around 4.8 per cent in power tariffs for 2026–27. The revised rates are scheduled to come into effect from April 3, 2026, TOI reported.

Industrial Clusters Express Cost Concerns

Major industrial regions such as Pithampur, Mandideep and clusters around Indore have indicated that the tariff increase will add to cost pressures for manufacturing units.

Industry representatives noted that electricity forms a critical component of production, and even modest hikes can have a substantial impact on operating expenses.

Pithampur Audyogik Sangathan President Gautam Kothari said, "The tariff increase will directly raise the cost of manufacturing. In the current global and domestic market conditions, when industries are already grappling with rising raw material prices, higher electricity tariffs will make products from Madhya Pradesh less competitive compared with neighbouring states like Gujarat and Maharashtra."

He added that micro, small and medium enterprises (MSMEs), which operate on tighter margins, are likely to be the most affected.

Global Pressures

Tarun Vyas, Secretary, Association of Industries Madhya Pradesh, said, "The electricity hike has come at a time when the West Asia conflict has already made industrial operations expensive due to higher fuel, shipping and raw material costs. This will further increase the cost of operations for industries."

Policy Support

To offset the impact, industrial associations have urged the state government to consider reducing VAT on industrial fuels such as natural gas and furnace oil to around 3–4 per cent, from the current 14 per cent.

They have also called for measures to promote solar energy adoption and a rationalisation of fixed electricity charges, suggesting that billing should be more closely aligned with actual consumption.

Industry representatives said such steps could help ease cost pressures and support manufacturing competitiveness in the state.

(KNN Bureau)

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