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Subsuming electricity into GST

This will reduce costs for businesses, eliminate cross-subsidy and reduce the inefficiencies in the use of electricity by the agriculture and residential sectors

Power grid, discom
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Photo: Bloomberg

Monika ManglaBadri Narayanan Gopalakrishnan
Improving the business environment is key to India’s development. Indian economic ambitions cannot be realized without cheap and reliable electricity for industry. According to the International Energy Agency (IEA), the electricity cost faced by the Indian industry is much higher as compared to other countries. For energy-intensive industries, high electricity prices play a crucial role in increasing their cost of doing business and adversely affecting their global competitiveness. 

One of the main reasons for the high electricity prices faced by Indian industries is the exclusion of electricity from GST. The exclusion of electricity from GST means that there is