Tamil Nadu: Implement promised power tariff relief, MSMEs urge govt
Further hikes will lead to the closure of the micro industries, cautions TACT chief
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CHENNAI: Representatives from Tamil Nadu's micro, small, and medium enterprises (MSME) sector have appealed to the state government to immediately implement the long-promised electricity tariff relief for small industrial consumers and withdraw the upcoming tariff hike scheduled for July 2025.
In a representation to the MSMEs Minister, K Mariappan, former president of the Tamil Nadu Small and Tiny Industries Association (TANSTIA), raised concern over the continued delay in reclassifying eligible consumers from the lower electricity tariff (LT 3B) to the subsidised LT 3A (1) tariff category. The reclassification, promised in a government order issued in 2023, was intended for low-tension consumers with connected loads below 12 kW.
“Despite the government's commitment to compensate the Tamil Nadu Generation and Distribution Corporation (Tangedco) for the resulting revenue loss, eligible consumers have not yet been migrated to the lower tariff category,” Mariappan stated.
Electricity charges for LT 3B consumers, which include small-scale industries and IT services, have risen sharply over the past four years. Energy charges have increased from Rs 6.35 per unit before 2022 to Rs 8 per unit in 2024. Fixed charges for connections above 112 kW have risen from Rs 35/kW/month to Rs 589/kW/month during the same period — an increase of over 450 per cent.
Average energy costs for LT 3B consumers reflect this trend, rising from Rs 7.80 per kWh in FY 2021–22 to Rs 9.51 in FY 2023–24.
Echoing the concerns, the Tamil Nadu Association of Cottage and Tiny Enterprises (TACT) president J James urged the government to roll back the 3.16 per cent tariff hike slated to take effect from July 1, 2025, and to review the steep escalation in fixed charges.
“Just as the Chief Minister has announced that the State will absorb the domestic tariff hike, we request that the same support be extended to MSMEs,” James said. He also called for immediate action to implement the 2023 reclassification order, enabling small enterprises with sanctioned loads below 12 kW to benefit from the LT 3A (1) tariff.
He said that the micro and small industries are on the verge of facing extinction due to the successive years of electricity tariff hikes. “Particularly, the micro industries located in Coimbatore that depend on job work are witnessing their margins going down with an increase in the labour and electricity cost. A further hike in the tariff will lead to the closure of the micro industries,” he said.
