NMCC wants price preference regime in power to continue

NEW DELHI: The National Manufacturing Competitive Council (NMCC) has opposed the government’s proposal to phase out 15% price preference given to the domestic manufacturers for purchasing power equipment under the mega power policy. The council has argued that it would be unfair for the domestic industry to do away with the price preference at a time when the exchange rates are largely in favour of the international suppliers.

Power ministry has proposed the removal of the price preference under the revised mega power policy, as it feels the clause is discriminative to PSUs that have to give this preference, and at the same time, ensure cheap power to consumers. NMCC has, however, argued that the government should first create a level-playing field between the domestic and international players and then take any such steps.

“Unfortunately, this is not the situation now (level-playing field), with obvious gaps and other policy and fiscal disadvantages impacting the domestic manufacturers which increase their transaction cost and cost of doing business at least by 15%,” NMCC said.

Its objections come close to similar objections that the council raised over government plan to permit NTPC as second equipment manufacturer and allowing the PSU freedom to source super-critical power plants through bidding than giving orders to Bhel on a nomination basis. The power ministry had rejected all the observations made by NMCC.

Dismantling of the price preference while allowing imports from foreign manufacturers with zero Customs duty would have a negative implication on the domestic industry, especially at a time when the government plans to create a “Made in India” image for domestic machinery manufacturing, NMCC argued. Under the current policy, it is mandatory for the generation companies to give a 15% price preference to the domestic power equipment suppliers.