50,000 industrial units at risk due to power tariff hikes, land policy changes, say Telangana industrialists

Hyderabad: As many as 50,000 industrial units are at risk due to the unilateral regulatory measures of an increase in power costs and the controversial land transformation policy of the Telangana government, said industrial and commercial organisations at the Federation of Telangana Chambers of Commerce and Industry (FTCCI) on Wednesday.

Various industrialists warned that the new draft policies being introduced by the State government will put the ‘Telangana Rising’ vision and the state at risk of financial issues.

The ‘power shock’: kVArh billing crisis

The most immediate threat cited by industry leaders is the sudden implementation of Lead kVArh billing.

Historically, industries operating with a ‘lead’ power factor—which helps stabilise the grid—were not penalised. However, DISCOMs have recently unblocked this billing component, effectively charging businesses for the reactive power they inject back into the grid.

Here’s a breakdown of the issues the industrialists said they are facing:

1. Financial impact: Business owners reported electricity bills skyrocketing by three to five times their usual amount within just three months.

2. Technical paradox: Industry experts argued that the move is ‘technically counterintuitive,’ as it penalises the very consumers who support grid voltage.

3. The demand: The bodies have called for the immediate formation of an expert committee, including representatives from the IITs and JNTU, to evaluate grid requirements and establish a phased transition roadmap.

“Unblocking Lead kVArh without technical readiness or awareness is punitive, not corrective,” said R Ravi Kumar, President of FTCCI. “It is eroding the hard-earned trust between the industry and power utilities.”

HILTP and GO 27: Relocation fears

The industrialists highlighted deep-seated anxieties regarding GO 27 under the Hyderabad Industrial Lands Transformation Policy (HILTP).

The policy aims to repurpose nearly 9,300 acres of industrial land within the Outer Ring Road (ORR) for residential and commercial use.

While the government frames this as a move to reduce urban pollution, industry leaders say the policy is ‘vague and unilateral.’

According to the industrialists, the issues with relocation include:

1. Lack of clarity: Business owners expressed concern over the absence of relocation support, compensation mechanisms and ready infrastructure outside the ORR.

2. Logistical nightmare: ‘Industries cannot be relocated like residences,’ spokespersons noted, emphasising that such a move requires years of workforce and supply-chain alignment.

The associations urged the government to keep the policy in abeyance until a consultative approach can be established.

Stalled green energy investments

Despite the launch of the Clean and Green Energy Policy in January 2025, industry leaders revealed that renewable energy growth has effectively frozen. This includes:

- The no-objection certificates have not been issued to solar developers for nearly a year.

- Due to the tariff burdens, the loss of Rs 1.50 per unit night-time concession is a challenge.

- High additional surcharges and wheeling charges on open-access power.

The industry is demanding the restoration of the Night Time-of-Day (ToD) concession or a significantly lower daytime tariff, citing the availability of cheap solar power during the day.

A call for partnership

The joint statement was backed by a heavy-hitting roster of associations, including the Telangana Industrialists Federation (TIF), Telangana Iron and Steel Manufacturers Association (TISMA) and the Cherlapally Industries Association (CIA).