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FM to hold pre-Budget meeting with Power Minister today
Finance Minister Pranab Mukherjee is to hold the pre-Budget meeting on Monday with the Power Minister Sushilkumar Shinde and Committee of Secretaries (COS) to address the issues impacting the growth in the power sector, mainly the issue of customs duty on imported power equipment.
The meeting is convened in the light of a letter written to the Finance Minister by the private power companies to hold any proposed move to levy the 14 per cent customs duty on the imported power equipment as suggested by the Planning Commission Member Arun Maira in a report submitted in February, 2010.
Last week the private power companies had requested the Government to keep any proposed move regarding the levy of the customs duty on imported power equipment in abeyance for the time being as it will only increase the cost of power generation and further delay the capacity addition.
In a letter to the Finance Minister Pranab Mukherjee, the Association of Power Producers (APP), a body representing private power companies in the country said: “Any step at this stage which increases the cost of power generation and leads to delays in capacity addition would be very detrimental to the sector.”
APP Director General Ashok khurana urged the Government in the letter to keep the decision in abeyance as there is no merit in increasing custom duties at this stage. He also said that sharp depreciation of the rupee against the Chinese yuan in the past one year has already made imports costlier.
Imposition of further import duties would only increase the capital costs, which would have to be passed on through tariffs to the already overburdened State Electricity Boards (SEBs).
One of the commonly mentioned reasons for India not meeting its generation capacity addition addition targets has been the failure of the domestic equipment manufacturing industry to fulfill orders within the required timelines.
Finance Minister Pranab Mukherjee is to hold the pre-Budget meeting on Monday with the Power Minister Sushilkumar Shinde and Committee of Secretaries (COS) to address the issues impacting the growth in the power sector, mainly the issue of customs duty on imported power equipment.
The meeting is convened in the light of a letter written to the Finance Minister by the private power companies to hold any proposed move to levy the 14 per cent customs duty on the imported power equipment as suggested by the Planning Commission Member Arun Maira in a report submitted in February, 2010.
Last week the private power companies had requested the Government to keep any proposed move regarding the levy of the customs duty on imported power equipment in abeyance for the time being as it will only increase the cost of power generation and further delay the capacity addition.
In a letter to the Finance Minister Pranab Mukherjee, the Association of Power Producers (APP), a body representing private power companies in the country said: “Any step at this stage which increases the cost of power generation and leads to delays in capacity addition would be very detrimental to the sector.”
APP Director General Ashok khurana urged the Government in the letter to keep the decision in abeyance as there is no merit in increasing custom duties at this stage. He also said that sharp depreciation of the rupee against the Chinese yuan in the past one year has already made imports costlier.
Imposition of further import duties would only increase the capital costs, which would have to be passed on through tariffs to the already overburdened State Electricity Boards (SEBs).
One of the commonly mentioned reasons for India not meeting its generation capacity addition addition targets has been the failure of the domestic equipment manufacturing industry to fulfill orders within the required timelines.
