Approximately 600,000 medium, small, and micro enterprises (MSMEs) in Karnataka face a grim business outlook due to on-going power supply disruptions caused by scheduled and unscheduled power cuts and load-shedding. These issues are likely to persist as the state grapples with a drought situation exacerbated by a failed monsoon this year.

Trade industry leaders express major concerns over MSMEs' inability to fulfil their commitments to both domestic and international customers on time, potentially resulting in conflicts and long-term business losses. A consistent power supply is crucial for manufacturing, and power interruptions are expected to adversely impact the state's economy as a whole.

The challenges faced by MSMEs are exacerbated by the fact that they are still in the process of recovering from the economic downturn caused by the pandemic. Continuous power interruptions disrupt production plans, leading to yield losses and conflicts with customers. Moreover, the lack of power directly increases production costs for smaller MSMEs, further straining their financial viability.

Ramesh Chandra Lahoti, the President of the Federation of Karnataka Chambers of Commerce and Industry (FKCCI), expresses concerns about the MSME sector's situation, citing the failure of the monsoon and the difficulty in maintaining a consistent power supply. The power cuts affect MSMEs in multiple ways, hampering production and increasing costs due to running generators. Trade bodies have called for subsidies on diesel for MSMEs, similar to those provided to farmers for agricultural purposes, to mitigate the financial burden.

The Karnataka Small Scale Industries Association (KASSIA) urges the state electricity supply companies (ESCOMs) to procure additional power promptly to prevent power cuts in the MSME sector. They emphasise the importance of uninterrupted power supply for industries and express disappointment in the government's lack of proactive measures to safeguard the interests of the industry and prevent revenue losses.

To address the situation, business leaders suggest implementing contingency plans, such as exploring alternative sources of energy like solar and wind power. They advocate for government support and promotion of these renewable energy sources, eliminating minimum threshold limits for procurement, to reduce dependence on the main power grids and ensure a more stable power supply for industries.

Source: The Hindu