Power tariffs may fall as corporate taxes reduced

KOLKATA: Installation of prepaid meters over the next three years will help ailing power distribution companies cut losses substantially while reduction of corporate tax for new power generation companies will reduce power tariffs for consumers.

“The reduction in taxes for new companies in the generation sector will prompt existing power companies to float special purpose vehicles that would be eligible for reduced tax at the rate of 15% against the existing 30% rate. They will also be able to bid lower tariffs in auctions thus reducing power tariffs for consumers and for fixed tariffs their profits would be higher,” said Sabyasachi Majumdar, group head at ICRA

Kameswara Rao – leader-energy, coal and mining at PWC India said: “It will also encourage them to scrap old and inefficient plants and use the land to set up efficient new units – in thermal, solar and hydel sectors among others.”