Electricity rate hike in Maharashtra: Another inflationary shock to Middle Class

 

💥💥💥 Electricity rate hike 💥💥💥

 

The Maharashtra State Electricity Distribution Company Limited (MSEDCL) is going to announce the new rate hike of electricity bills on this Friday for 2023-24 year.

 

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MSEDCL have submitted the new electricity rate hike proposal of 37% rate hikes to the electricity board. And the final rate hikes are going to announce on Friday 31st March 2023 after revision. MSEDCL has submitted the rate hike proposal to the Maharashtra Electricity Regulatory Commission (MERC) board who is responsible for reviewing and approving electricity rate hikes. MERC unlikely to accept the complete proposal as it is. But there would be chance to revised rates as per below table or at least by 1 rupees per unit.

New Proposed Electricity Rates:

The revised rates will came into effect from 1st April 2023 onwards with 37 %  increments  in new hike rates on electricity consumption which affects consumers with respect to their bills.

As per the new rates of 37% increment, consumers in the residential and agricultural categories will have to pay an increased rate of INR 2.55 per unit.

Category	Current      Rate (per unit)	New Rate after Increment (per unit)
Commercial	7.07 - 9.60	12.76 - 17.40
Small Scale Industrial	5.11 - 6.05	6.90 - 8.20
High Scale Industrial	6.89	9.32
Agricultural	1.95 - 2.29	2.70 - 4.50
Residential (2023-24)	3.36	4.50

Current rate of electricity for commercial category is 7.07 – 9.60. After increment it will be 12.76 – 17.40.

Current rate for small scale industrial category is 5.11 – 6.05. New rate after increment will be 6.90 – 8.20.

Current rate for high scale industrial category is 6.89/unit after increment it will be 9.32. For agricultural categories Current rate is 1.95 – 2.29 after increment it will be up to 2.70 – 4.50

For 2023-24 year consumers in the residential categories will have to pay an increased rate will be INR3.36 per unit to INR4.50 per unit. and max rate hike will be from INR11.83 per unit to INR16.60 per unit. For 2024-25, INR5.10 to INR18.70 per unit.

The state government, however, has defended the hike, stating that it was necessary to ensure the financial sustainability of the electricity distribution sector. The government has also promised to take measures to mitigate the impact of the hike on low-income households and farmers, such as increasing subsidies and exemptions.

Several factors contribute to the rising costs of energy:

1.     The cost of fossil fuels, imported coal, and the expansion of renewable energy.

2.     The need for infrastructure upgrades is also driving energy costs higher.

3.     Cross subsidies were insufficient during the Covid-19 period.

4.     Recovery of pending arrears of 86000 crores is also a factor contributing to the rate hike.

 

Impact on Middle Class Household Budget:

It remains to be seen how the state government and consumers will respond to the latest development in this ongoing saga.

For many household the increase in electricity rates will mean an increase in their monthly bills making it more difficult for them to manage their finances. This could be inflation shock and will lead to people cutting back on other expenses or even struggling to pay their bills on time.

While it may seems like there is little that can be done to mitigate the impact of the electricity rate hike, there are some steps that households can take to reduce their consumption and save money on their bills.

Effective ways to reduce your electricity consumption:

One of the most effective ways to reduce your electricity consumption is to switch to energy efficient appliances and light bulbs. This can significantly reduce your monthly bills and help you save money in the long run. You can also make simple changes to your daily habits such as turning off lights when leaving a room or unplugging electronics when they are not in use.

Neither option is to consider alternative sources of energy such as solar panels or wind turbines. While these options may require an initial investments they can ultimately help you save money on your electricity bills.

 

Disclaimer: The information provided here is based only on beliefs and facts. It is important to know that we does not endorse or verify any information. Before applying any information or belief, seek advice from a relevant expert.

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