Srinagar, Aug 23 : The Kashmir Chamber of Commerce and Industry (KCCI) has expressed serious concern and strong resentment over 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 given the prevailing economic situation in Jammu and Kashmir.
In a statement, the Chamber said the economy of Jammu and Kashmir is already passing through a challenging phase, with businesses across sectors facing weak demand, rising operational costs and an uncertain economic environment. At a time when households , businesses and industry require relief and support for economic recovery, increasing electricity tariffs would impose an additional financial burden on consumers and enterprises, KCCI said.
The Chamber observed that the global business environment is also fragile, with geopolitical tensions and the ongoing conflict in West Asia having adversely affected economies, trade and household incomes. The resultant uncertainty has affected consumer spending and business confidence, making it imperative for governments to adopt measures that reduce costs and encourage economic activity rather than add to the existing burden.
KCCI said Jammu and Kashmir’s economy is particularly vulnerable because several key sectors are already under stress. Industry is facing unprecedented downturn ; Tourism, which remains a major contributor to the local economy, is facing challenges; handicrafts and exports have witnessed a decline; retail trade is under pressure; and the horticulture sector is also confronting serious difficulties.The Chamber said the tariff hike would compound these problems by increasing the cost of operations across sectors.
It said the impact of higher electricity tariffs would not be limited to power bills. For industries, commercial establishments, workshops, hotels, restaurants, shops and other businesses, electricity is an essential operating input. Any increase in its cost directly raises operational and production expenses and can ultimately result in higher prices for goods and services. This, in turn, could have a cascading effect on the entire economy.
The Chamber also expressed concern over the implications of the hike for households, saying reduced disposable income could further affect consumer demand at a time when retail and other consumer-facing businesses are already struggling to maintain activity.
KCCI recalled that it had participated in the previous JERC public stakeholders’ consultation and had submitted its objections in writing against the proposed tariff hike. The Chamber said it had clearly conveyed that the prevailing economic circumstances did not warrant any additional burden on consumers and businesses.
KCCI further noted that the JERC public hearing this time on the tariff revision was not adequately publicised, leaving consumers and stakeholders largely unaware of the opportunity to put forth their objections and concerns.
The Chamber further recalled that during the period when the tariff proposal was under consideration, Chief Minister Omar Abdullah had given assurance that the government would not go for a power tariff hike. KCCI said the subsequent imposition of the increase has therefore come as a matter of serious concern, particularly when the economic situation remains fragile.
KCCI stressed that its opposition is rooted in the broader economic consequences of the decision. Higher electricity costs would particularly affect small businesses and MSMEs, which often operate on narrow margins and have limited capacity to absorb additional recurring expenses. The increase could affect profitability, employment, investment and expansion plans.
The Chamber said the government should focus on reducing the cost of doing business and creating conditions conducive to investment and economic revival. It maintained that while the financial sustainability of the power sector is important, tariff decisions must also take into account the paying capacity of consumers and the overall health of the economy.
KCCI has demanded that the 6.83 per cent power tariff hike be rolled back immediately and 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 and provide relief to households, traders, industries and other economic stakeholders rather than adding to their existing burden.(KNS)
