KCCI opposes 6.83% power tariff hike, demands immediate rollback

Ziraat Times News Desk

Srinagar, August 23: The Kashmir Chamber of Commerce and Industry (KCCI) has strongly opposed the recently announced 6.83 per cent hike in power tariffs by the Joint Electricity Regulatory Commission (JERC), terming the decision insensitive and ill-timed amid the prevailing economic challenges in Jammu and Kashmir.

In a statement, the Chamber said the economy of Jammu and Kashmir was already passing through a difficult phase, with businesses across sectors facing weak demand, rising operational costs and an uncertain economic environment. At a time when households, businesses and industries require support for economic recovery, the tariff increase would impose an additional financial burden on consumers and enterprises, it said.

KCCI also pointed to the fragile global economic environment, saying geopolitical tensions and the ongoing conflict in West Asia had adversely affected economies, trade and household incomes. The resulting uncertainty had weakened consumer spending and business confidence, making it necessary for governments to adopt measures that reduce costs and stimulate economic activity rather than add to existing pressures.

The Chamber said several key sectors of the Jammu and Kashmir economy were already under stress. Industry was facing an unprecedented downturn, tourism was confronting significant challenges, handicrafts and exports had witnessed a decline, retail trade remained under pressure and the horticulture sector was also facing serious difficulties.

According to KCCI, the power tariff increase would compound these difficulties by raising operating costs across sectors. It said the impact would extend beyond electricity bills, as industries, commercial establishments, workshops, hotels, restaurants, shops and other businesses depend on electricity as an essential operating input.

“Any increase in the cost of electricity directly raises operational and production expenses,” the Chamber said, adding that businesses could ultimately be compelled to pass on the additional costs through higher prices for goods and services, creating a cascading impact across the wider economy.

KCCI also expressed concern about the impact on households, arguing that higher electricity bills could reduce disposable incomes and further weaken consumer demand at a time when retail and other consumer-facing businesses were already struggling to maintain economic activity.

The Chamber recalled that it had participated in the previous JERC public stakeholders’ consultation and submitted written objections against the proposed tariff hike. It said it had clearly conveyed that the prevailing economic circumstances did not warrant imposing any additional burden on consumers and businesses.

KCCI also questioned the manner in which the latest JERC public hearing on tariff revision was publicised. It said the hearing was not adequately publicised, leaving consumers and other stakeholders largely unaware of the opportunity to submit their objections and concerns.

The Chamber further recalled that, during the period when the tariff proposal was under consideration, Chief Minister Omar Abdullah had assured that the government would not go for a power tariff hike. KCCI said the subsequent imposition of the increase had therefore caused serious concern, particularly when the economy continued to remain fragile.

The Chamber said its opposition was based on the wider economic consequences of the tariff decision. It noted that higher electricity costs would particularly affect small businesses and micro, small and medium enterprises (MSMEs), which generally operate on narrow margins and have limited capacity to absorb additional recurring expenses.

According to KCCI, the increased costs could affect business profitability, employment, investment and expansion plans, potentially slowing the pace of economic recovery.

The Chamber urged the government to focus on reducing the cost of doing business and creating conditions conducive to investment and economic revival. While acknowledging the importance of ensuring the financial sustainability of the power sector, KCCI maintained that tariff decisions must also take into account the paying capacity of consumers and the overall health of the economy.

KCCI has demanded the immediate rollback of the 6.83 per cent power tariff hike and called for the increase to be kept in abeyance until the economic situation in Jammu and Kashmir improves.

The Chamber urged the government and concerned authorities to reconsider the decision in the larger public and economic interest, saying households, traders, industries and other economic stakeholders needed relief and support rather than an additional financial burden.