Ravichandran PurushothamanI grew up on a farm, where you learn to never waste what you spent months cultivating. The sun is free. Diesel is not. That lesson came back in April, when Rajasthan—India’s largest solar state with 41 GW of capacity—was forced to switch off its own sunshine. In March alone, 8,300MW of renewable power was curtailed. At Bhadla, 47 lakh units were wasted in a fortnight, costing developers over `250 crore. The problem was not a lack of sunshine, but a power system unable to absorb what it produces. We run India’s power sector like a farm that lets its harvest rot.The owner of an auto-component unit near Sriperumbudur put it simply. His rooftop solar generates more electricity than he needs at noon. By evening, he buys power from the grid at `8 a unit. “I am rich in electrons at noon,” he said, “and bankrupt at 6 pm.”His Chinese competitor pays just `2.80 per unit for electricity. Vietnam—which grew 8 per cent last year and exported $475-bn of goods from an economy smaller than Tamil Nadu’s—also pays less. That cost disadvantage is embedded in every quote when a procurement manager in Stuttgart compares suppliers. It translates into orders India never wins, factories never built, and jobs never created. For MSMEs, which account for nearly 45 per cent of industrial electricity consumption, power costs are not merely a margin issue—they are an existential threat. Make in India cannot be built on `8 power.The subsidy paradoxGovts offer MSMEs capital subsidies, interest subventions, credit guarantees, and technology schemes. Yet none addresses the structural disadvantage of expensive electricity. Only about `2 of the `8 tariff reflects the actual cost of generating power; the rest funds the legacy costs and social obligations. Instead of reimbursing businesses through multiple schemes, India would achieve more by lowering industrial power tariffs. Cheap electricity is the most effective industrial policy because it reaches every enterprise automatically.
Ravichandran Purushothaman, chairman, CII Southern Region, and president, Danfoss India
Modern utility-scale solar and wind in peninsular India now generate electricity for under `3 — zero fuel, zero freight, financed at rates no thermal developer can match. South India has 61GW of renewable capacity, world-class wind corridors and sunshine for about 300 days a year. Few regions possess such a natural manufacturing advantage. But Rajasthan offers a cautionary tale. Generation expanded faster than transmission, while distribution companies lacked the capacity to absorb intermittent power. Every evening at 6pm, Southern solar drops to zero, spot prices spike to `9–12 a unit, and 61GW of capacity waits for tomorrow’s sun.Discom balance sheet woesThe root cause lies with financially stressed distribution companies. Burdened by subsidised agricultural supply and tariff freezes, discoms struggle to invest in transmission, storage, or smarter pricing. The result is higher industrial tariffs and more renewable curtailment.Every rupee of discom losses ultimately appears on an industrial electricity bill.What states such as Tamil Nadu need is generation, transmission, and distribution planned as one, not three silos. Transmission corridors sanctioned alongside renewable parks; storage as a core infrastructure; time-of-day tariffs that reward industry for consuming when solar floods the grid; discom revenue models redesigned so utilities profit from enabling cheap power, not from obstructing it.Tamil Nadu alone could unlock 4,000–5,000MW within two years by repowering ageing wind farms, expanding rooftop solar through higher net-metering limits and solarising agricultural feeders. This would free over 1,000MW for industry. As a result, farmers would receive reliable daytime power, industry would gain cheaper electricity, and discom finances would improve.Window will not stay openVietnam’s low energy costs are already under pressure, creating an opportunity for Southern India. But that advantage will not last indefinitely. Our MSMEs are already capable. What stands between them and global competitiveness is not the absence of subsidies—it is a power system designed for another era. Fix the system, and subsidies will matter far less.The author is chairman, CII Southern Region, and president, Danfoss India
