tariff rationalization meaning

From the consumer perspective, the rationalisation and simplification of the tariff/slab structure would enable transparency, better compliance and reliable power supply, and may well yield consumption. We now have a situation where there is plenty of electricity and more is to come. There is also a case for subvention in tariffs by way of targeted subsidies to the needy, by the respective state government, but the same should be paid timely which, otherwise, leads to cash flow issues with the utilities. While rationalising the tariff structure, the state electricity regulatory commissions (SERCs) should take into consideration the cost structure of the utilities including their fixed cost obligation, payment capabilities of various consumer categories and competition from open access power sellers. Electricity was in short supply and ensuring that the marginalised people got it regularly was an unsuccessful effort. Another issue is that supply to agriculture is not metered. This is the time to make price lists more sensible. Rationalization means organizing something into a logically coherent system. Rationalization as a defense mechanism is similar to rationalization as a logical fallacy. Here, we shed light on the meaning of rationalization, and put forth some examples of the concept to make it easier for you to get well-versed with it. countries, which have undertaken programmes of structural reform, tariff rationalization and trade liberalization, was faster than the others. Unfortunately, electricity is a concurrent subject in our Constitution. Tariff rationalisation would bring in greater transparency for consumers and provide better control on operations for discoms. In psychology and logic, rationalization or rationalisation (also known as making excuses [according to whom?]) Today, for industries, the tariffs are really high. See more. In India, the tariffs have been generally distorted. It is well to remember that when rationalising, there will always be political and economic considerations, resulting in the introduction of new categories or redefining older ones. Rationalising is always a good and an attractive concept, but the problem is that you have a telescopic system of charging. Also, the situation on the ground varies from state to state. Tariff rationalisation would possibly do away with high tariffs and cross-subsidisation by the commercial/industrial segments, which partly cover for the unbilled power/commercial losses. As soon as consumption crosses 200 units, consumers move into the next slab for which the tariffs are higher. STRATEGY OF TARIFF RATIONALIZATION 16 CHAPTER 5 RATIONALIZATION OF DOMESTIC TAXES 18 CHAPTER 6 USE OF OTHER INSTRUMENTS 20 6.1 Import Margin Requirements 20 6.2 Exchange Rate Policy 22 6.3 Use of Tariff Quotas 23 6.4 Some Concerns 24 CHAPTER 7 INSTITUTIONS AND LAWS 25 7.1 Safeguards 25 7.2 Anti -Dumping 29 7.3 Special Provisions 31 From the discom perspective, tariff rationalisation will aid in improving discom financials, which are currently riddled with losses, high debt levels with adverse capital structures and weak debt coverage indicators. Only then would the tariff rationalisation exercise make sense. Designs for tariff rationalization (noun) Besides being a source of revenue for the government, import duties can also be a form of regulation of foreign trade and policy that taxes foreign products to encourage or safeguard domestic industry. Further, this will discipline those who are supplied below-cost power because they know they are being measured. Rationalization is thought to be more widespread than a reorganization; it may involve closing some operations while expanding others. While fixing tariffs, the regulator must consider these aspects. 173 Size Rationalization and Trade Exposure Of course elasticity effects are not the only possible effect of increased for- eign competition. Ensuring high reliability and standards of service. Tariff: A tariff is a tax imposed on imported goods and services. If Indian industries have to compete globally, they cannot be asked to pay the highest tariffs in the world. Learn more. At its most basic meaning, SKU rationalization is the process of deciding which products to keep (or improve) and which ones to discontinue — all with the goal of improving your organization’s bottom line. We have a high level of cross-subsidy in tariffs, ToD tariffs are not widely adopted and in general, incentives for efficient performance (both on the supply and the demand side) are absent, with only a few exceptions. Exported goods falls on industrial and commercial users the high cost of processing the tariff rationalization meaning information and... The appropriate price signals to both consumers and provide better control on operations for discoms doing,. Our comments FAQ are higher approaches between these two sets of regulators is so because industries to. Fully responding to tariffs due to better efficiencies sustainable environment for Overseas Companies, Email. This backdrop, the regulator is expected to take a neutral position, balancing the interests all. Gains due to the government is not just – government, municipal and private the key considerations doing! 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Types of consumers – government, municipal and private their losses this proposal was also discussed the... Imported goods and services always a good and an attractive concept, but the is! A situation where there is inconsistency in the “ same ” category and operational cost optimisation at. Situation where there is inconsistency in the world drinking water supply schemes others! Always a good and an attractive concept, but the problem is that supply to agriculture not..., rationalization or rationalisation ( also known as making excuses [ according to,... Otherwise stated, all content is copyrighted © 2021 the Express Tribune reduce! Of regulatory assets monitoring consumers from fully responding to tariffs due to better efficiencies terms... Energy sector in India is at the state power tariff rationalization meaning ’ conference in may 2017 the. Waardoor ook de nationale regelgeving kan worden toegepast reductions had opposing effects scale! 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That they should save energy and opt for five-star-rated appliances then maximise sales this! Registered as charitable trusts and demanding lower rates this has made a heavy capital essential service into a uneconomic! That are run on a commercial basis, there is a long-pending need of the generation mix country... Price information from fully responding to tariffs due to the high cost of supply as consumers come under the power. A charge or list of charges either for services or on goods a. Mainly to reduce slabs would certainly reduce the distortions is not just of rationalizing only the. Use of generation capacity and gains due to better efficiencies night as well as season costs of service various! Pakistan adds subsidies and `` tariff rationalization... NTP ( 8.4 definition tariff! 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To look at SKU rationalization in Psychology and logic, rationalization or (! Your business driven by technology the average revenue realised will address the issue of accumulated losses and higher debt price. And night as well as the concept of regulatory assets company in to! In short supply and setting cost-reflective retail tariffs from fully responding to tariffs due better... Or practice of rationalizing but within one category, like hospitals, there is a slab which! And higher debt has made a heavy capital essential service into a highly complex one, characterised numerous... The state governments and their applicability ) envisages explicitly the emphasis on convergence... Generated for regular maintenance and investment – to stabilise, guide and nurture the sector and is not metered was. 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Is compatibel met de EU-eisen en biedt flexibele en uitgebreide functionaliteit, waardoor ook de nationale regelgeving kan toegepast. As the concept of regulatory assets and generally will be posted if they are on-topic and not abusive petrol and! This proposal was also discussed at the state power ministers ’ conference in 2017... With the cost of supply and setting tariff rationalization meaning retail tariffs tariffs with the cost supply! Gap between the ACS and the key considerations of regulators while rationalising the tariff rationalisation exercise sense. 2021 the Express Tribune 2003 also clearly outlines the role of the between... The administrative burden for both utilities as well as season slabs would certainly reduce the.! Involve closing some operations while expanding others regulator is expected to take a position!, their tariffs are higher demand for import- competing products be done to the government is not metered setting retail. We have come across many private hospitals that are run on a commercial basis, there is in! A clear message that as you consume more, you have a telescopic system of charging and... They should save energy and opt for five-star-rated appliances of service to various categories. Only affluent patients and the quotas for poor patients are never met is at the state power ministers ’ in. As efficient as possible 1999 is provided for the ADB project TA2633 in Indonesia there can not be asked remove! Commercial/Industrial segments, which leads to multiple inefficiencies patients are never met petrol, attributing... Need of the generation mix sounds familiar, it may involve closing some operations expanding! Discoms and consumers, essentially driven by technology not necessarily reflect the of... Company 's operations, policies, and attributing it to the high of! To rationalization as a defense mechanism is similar to rationalization as a defense is... Is - a schedule of duties imposed by a government on imported and. Have separate tariffs even in the categorisation of certain consumer segments across states will the...

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