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Power minister persuades states to reduce the number of slabs for selling power

08 Dec 2017 Evaluate

In an effort to build a political consensus in favour of standardising electricity tariffs across the country, Minister of State (Independent Charge) for Power and Renewable Energy, RK Singh, has persuaded State governments to reduce the number of slabs for selling power.

Singh said that it has been decided the number of power tariff slabs across States will be reduced to 12 to 15 from up to 90 slabs existing today in some States. However, he also added that the success of this proposal will hinge on the States’ willingness to implement it as electricity is a State subject and has political as well as financial implications.

The move is aimed at getting closer to bringing electricity under the ambit of the Good and Services Tax regime. The current variation in power prices and the differing tax structures make it difficult to have a uniform tax rate on power across the country. Once there is parity between power tariff slabs, it will be easier to have fit them in the GST slabs. The minister also said that the cross-subsidy on power should be restricted to 20 per cent. Consumers should not be burdened due to inefficiencies of the power distribution companies.

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