The State government has a prohibitive policy on captive power generation, with 26 to 28 per cent of what is generated having to be sold to state discoms. While the policy was initiated to discourage captive generation earlier in the decade, there is a need to change it now as no respite from the power crisis is expected in the next year and a half.
Currently, no input tax credit is given on generators and diesel. The industrial sector has to pay an electricity duty as well as maximum demand (MD) charges even when the sector is not getting full power supply.