Power Ministry wants dividend tax for IPPs dropped

By Our Special Correspondent

NEW DELHI, DEC. 15. The Union Ministry of Power has asked the Finance Ministry to remove the dividend distribution tax of 22 per cent imposed on independent power producers. Another proposal from the Power Ministry is for the reduction in the high import duty on liquid fuel.

This information was given out by the Special Secretary in the Power Ministry, Mr. S. S. Sharma, at a meeting organised by the Confederation of Indian Industry here today. Mr. Sharma said the independent power producers were finding it difficult to remain viable with the 22 per cent dividend distribution tax and also the high import duty on liquid fuel was resulting in high end- price for the power produced by the companies.

Stressing on the need to have a policy conducive for private investment in the power sector, Mr. Sharma said ``unless the State electricity boards are in a position to pay for the power they purchase, there is no hope for the power sector, since private investment would always be shy of investment where returns are unsure. Therefore, the reforms process become even more important,'' he added.

On the need to go in for large-scale metering of power consumption, Mr. Sharma said Government had taken a decision to ensure complete metering of all supplies by the end of December 2001.

The Special Secretary also emphasised on the need for greater investment in setting up transmission facilities since inter- regional transferability of power was limited to about 3,000 MW only.

The Government had, therefore, planned to set up a national grid which would ensure transfer of power to the extent of 30,000 MW by 2012, he added.

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