Not long after the removal of subsidies on LPG and Kerosene, Dasho Karma Ura, a member of the Interim government, says the Ministry of External Affairs of the government of India has indicated to remove two more subsidies.
Dasho Karma Ura said removal of four subsidies will have a huge impact on national exchequer. Speaking on the Chhukha Tariff, Dasho said Ministry of External Affairs in India used to give an additional or top-up of 45 paise per unit so that Bhutan received a tariff rate of 2 Rupees per unit through Power Trading Corporation of India.
Dasho also shared that the Government of India has communicated that it would like to discontinue the excise duty refund. Dasho Karma Ura said the total import bill for the LPG and Kerosene at the same quantity imported last year will rise from 267.5 million rupees in 2012 to 847.1 million rupees in a year’s time.
Meanwhile, the Managing Director of the Druk Green Power Corporation, Dasho Chhewang Rinzin, also a member of the interim government said, they have not received any official communication on the reduction of Chhukha tariff. He added that it remains the same at 2 rupees per unit, as it has been since January 2005.
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According to the statement, the apprehensions expressed by the Interim Government Adviser Dasho Karma Ura on Chhukha power tariff are worrying.
The statement states that even if the subsidy is removed, it won’t affect the tariff that Chhukha gets from Power Trading Corporation of India. This is because, the Power Purchase Agreement has no provision, of any subsidy component. Therefore, the statement reads, that there is no impact on the revenues from the export of surplus power from the Chhukha hydroelectric project to India atleast as of now.
On the other hand, the Ministry of Economic Affairs has been in touch with the government of India for an upward revision of the Chhukha power tariff from the present rate for some time now. The statement says that the Ministry hopes for a positive outcome of the consultations.
On the removal of excise duty refund, the statement says the refund of excise duty is governed by the 2006 Agreement on Trade, Commerce and Transit between the two governments. And if there is going to be a change in the arrangement for the excise duty refund, the two Governments may have to consult further on this.
“If there arises a need, an official statement will be made before the General Elections and latest by Thursday evening,” says a release from Chief Adviser to the Interim Government.
