Power cuts cause 10% loss in factory outputs

Power cuts cause 10% loss in factory outputs

By NAVTAN KUMAR | New Delhi | 19 January, 2013
12% of the factories in India are suffering production loss due to a shortage in power.
Companies are fed up with power cuts and as many as 61% of them are willing to pay more for reliable, good quality and uninterrupted power supply.

Over 60% of Indian companies have witnessed more than 10% of production loss because of shortage of power in the country; 12% of them are suffering 6-10% production loss, according to a study. The study carried out by the Bureau of Research on Industry and Economic Fundamentals (BRIEF) says that 13% of the companies are suffering a 2-4% production loss; and only 14%, mainly in Gujarat, Karnataka and Maharashtra, are suffering less than a 2% shortfall in production

The study was commissioned by FICCI, after the failure of the Northern and Eastern Grids in July last year brought a major part of the country, including Delhi, to a standstill.

The companies are so fed up with these power cuts that as many as 61% of them are willing to pay more for reliable, good quality and uninterrupted power supply.

The survey was conducted over the last three months and covered 650 large, medium and small industries in 20 states across India. It shows that companies in Gujarat incur low losses as power shortages there are negligible. Companies in Karnataka are mostly IT-related, so do not require as much power as the manufacturing sector does, and therefore, suffer less production loss.

The shortage in power is leading to cost escalation, revenue losses, increased fuel consumption, increased investment in captive facilities, higher inventory costs and loss in competitiveness, which are "seriously detrimental" to the health and stability of the Indian industry.

The survey reveals that overall, 32% of industrial units across India face a power shortage of over 10 hours a week. About 37% of companies, mainly in Gujarat, Maharashtra and Karnataka face less than 1 hour of power shortage in a week and at the same time 5% suffer 21-30 hours per week; 21% suffer more than 30-hour shortages per week (mainly in Tamil Nadu and Andhra Pradesh). It was also found that 16% face 6-10 hours of power cuts per week, while 15% face 1-5 hours of weekly cuts.

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