Andhra hikes power and rice price

HYDERABAD, APRIL 6: Power tariff and price of subsidised rice are being steeply upped.While power tariff is being raised to fetch Rs 800 c...

HYDERABAD, APRIL 6: Power tariff and price of subsidised rice are being steeply upped.

While power tariff is being raised to fetch Rs 800 crore additional revenue to the Transmission Corporation, the burden of more than Rs 400 crore, caused on account of the hike in issue price of rice by the Centre last week, will have to be borne by the white card-holders who will have to pay anywhere between Rs 1.50 and Rs 3 more per kg. The present price of subsidised rice is Rs 3.50 per kg.

The two major decisions were taken by the Andhra Pradesh Cabinet which met here today.

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While the revision in power tariff will come into effect after it is notified by the Tariff Regulatory Commission (expected to happen within two months), the Cabinet will meet again on Saturday or Monday to determine the exact increase in respect of subsisided rice price.

The Transo had been bringing pressure on the State government since long for a hike in tariff to bridge the mounting deficit which was projected at a whopping Rs 3,700 crore for the financial year 2000-2001.

If the government decides to supply power to any category at less than the rate fixed by the commission, it has to compensate the Transco through subsidy.

In respect of rice, the government said, the increase in the issue price by the Centre resulted in an additional burden of more than Rs 460 crore per year — going up from the present Rs 1,063 crore to Rs 1,526 crore.

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“The financial situation of the State does not permit us to absorb the increase in the issue price and continue to sell at Rs 3.50 per kg to the 1.13 crore white card-holders. We will discuss the options threadbare again before finalising the hike,” Goud said.

From a meagre Rs 4 crore in 1982 when the rice scheme was launched, the subsidy has increased to unmanageable proportions over the years thanks to the increase in the number of white cards and hike in the issue price.

The government requires 23 lakh tonnes annually for distribution of 20 kg a month to the 1.13 crore white card holders. The State government is now getting 9.6 lakh tonnes at Rs 6.50 per kg and has to purchase the remaining quantity of 13.9 lakh tonnes at Rs 12.50 per kg.