The Economic Survey 2015-16 had suggested simplification of power tariffs with no more than two to three tariff categories, which would improve transparency and collection efficiency along with governance benefits. Rationalization The process of reorganizing and overhauling a company's operations, policies, and anything else needed to make the company more efficient. 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. In India, the tariffs have been generally distorted. The aim here is to complet… Timely tariff revisions will go a long way in addressing the revenue gap faced by the utilities, which is prudently allowed by the regulator by way of tariff revisions/creation of regulatory assets. We must also recognise that the energy sector in India is currently structured in an inherently inefficient manner. 5 • Recognition of the national interest in tariff reform is critical in order to avoid the folly of entering multilateral, regional and bilateral trade negotiations with the false view of tariff Tariff setting is one of the key responsibilities of the regulator and that is an important tool to ensure business viability, stakeholder protection and well-being and also for sending out the right signals for the future. The hue and cry over the increase in the prices of petrol, and attributing it to the government is not just. The discom can then maximise sales and this will lead to maximum use of generation capacity and gains due to better efficiencies. Tariff Rationalization ... NTP (8.4 Definition of tariff components and their applicability) envisages explicitly the emphasis on the ToD Tariff. Rationalisation of tariffs will enhance efficiency, stop complicated and inefficient accounting cross-subsidies, ensure demand consistency through the year, improve capacity utilisation in generation and even distribution, and benefit the steady buyer. In real life, they cater to only affluent patients and the quotas for poor patients are never met. Tariff definition is - a schedule of duties imposed by a government on imported or in some countries exported goods. Rationalization definition is - the act, process, or result of rationalizing : a way of describing, interpreting, or explaining something (such as bad behavior) that makes it seem proper, more attractive, etc.. How to use rationalization in a sentence. A common template for industries and commercial users may be possible across the states. In a country like India, where momentous changes are taking place in the sector, in terms of service provisions and costs as well as the technological shifts, the role of the regulator assumes greater importance. During the six years following the Free Trade Agreement with the United States, Canadian manufacturing exhibited substantial rationalization – a decline in the number of plants accompanied by increases in output per plant. Trade reforms that amount to tariff reductions or real cur- rency appreciation may act mainly to reduce domestic demand for import- competing products. Only then would the tariff rationalisation exercise make sense. The hue and cry over the increase in the prices of petrol, and attributing it to the government is not just. Sector experts share their views on how the tariff structure can be rationalised and the key considerations in doing so…. If a particular consumer or group or industry is to be favoured and supplied free or below-cost electricity, we must identify each such consumer and know how much electricity is to be supplied at those lower rates (or free), and the government must reimburse the discom without delay. 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. The proposed move to reduce slabs would certainly reduce the administrative burden for both utilities as well as consumers. The discom must not be asked to cross-subsidise one consumer or group by charging more from the larger consumer. We find that the bilateral tariff reductions had opposing effects on scale. A vast majority, if not all, consumers would also turn into generators of some scale and size, reducing their dependence on discoms to only a fraction of their total power requirement. If we take out the assured returns on deployed equity and the taxation components, there is hardly any room left for the regulator for tariff manoeuvring. tariff definition: 1. a charge or list of charges either for services or on goods entering a country 2. a charge or…. Learn more. Ensuring high reliability and standards of service. 173 Size Rationalization and Trade Exposure Of course elasticity effects are not the only possible effect of increased for- eign competition. Another key issue that must be taken into account before rationalising tariffs is that discoms should adopt advanced meter reading or automatic meter reading and eliminate the involvement of any human element. The basic rationale in tariff design has to be to reflect the cost of service each consumer category and at the same time provide reasonable returns to the utility and incentivise efficient performance. 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. What is tariff rationalization? This is a long-pending need of the sector and is clearly emphasised in the National Tariff Policy. 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. TV) (Tariff Agreement, July 2, 1997, Protection From Rationalization Measures, Termination of Employment, and Income Protection (Protection Agreement)). Please leave this field empty. The SERCs should also provide a roadmap to reduce cross-subsidies with the objective of keeping tariffs across categories within 80 per cent to 120 per cent of the average cost of supply (ACS) of a distribution utility. This revision implements increases to pay schedules, to “dynamic supplements,” and the adjusted date for terminating these pay schedules in accordance with Tariff Agreement Rationalize definition: If you try to rationalize attitudes or actions that are difficult to accept , you think... | Meaning, pronunciation, translations and examples With a view to simplifying electricity tariffs, the power ministry recently constituted a committee for developing a framework for the creation of tariff categories that enable uniform and homogeneous electricity tariff categorisation across the country. Rationalisation cannot be done to the extent that it is being talked about. This must change. Tariff rationalisation would bring in greater transparency for consumers and provide better control on operations for discoms. 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. See more. This requires complicated accounting and is not the business of the discom. redistributed or derived from. This is so because industries have to cross-subsidise agriculture. See more. the purpose is to help domestic suppliers compete more effectively in the home market.– Prohibitive Tariff: the tax is so high that it makes an import far too (prohibitively) expensive. The role of discoms as well as consumers would change unbelievably with neither the discoms remaining the sole source of power supply to end-users nor consumers being just consumers. Tariff definition, an official list or table showing the duties or customs imposed by a government on imports or exports. This material may not be published, broadcast, rewritten, Rationalization is thought to be more widespread than a reorganization; it may involve closing some operations while expanding others. Another issue relates to high tension consumers, that is, consumers with consumption of 1 MW and above, who are the real revenue generators. Almost 70 per cent of the cost of delivered electricity is on account of fuel costs and is completely outside the purview of the regulator. We must have tariffs that vary with time of day and night as well as season. The central government is in discussion with the state governments to rationalise the tariff structure for distribution utilities by reducing the number of tariff categories. of Pakistan adds subsidies and "tariff Rationalization Surcharge" to make it uniform and notify. Today, the entire burden of cross-subsidising agriculture finally falls on industrial and commercial users. The Meaning of Rationalization in Psychology Explained With Examples. The power sector in India is at the cusp of an unprecedented transformation, essentially driven by technology. ArcticTARIFF is een compleet web-based tariefsysteem voor de douane-administratie overheden in de landen van de Europese Unie (EU). The key considerations for tariff rationalisation could include: However, one must realise that, notwithstanding the electricity commissions, the government still has significant regulatory roles and responsibilities. When we talk of tariff rationalisation, this is the real issue. to causes that superficially seem reasonable and valid but that actually are unrelated to the true, possibly unconscious and often less creditable or agreeable causes. What is encouraging the government to go in for tariff rationalization is the response to the Thai and Japan offers which offered a discounted tariff rate. But within one category, like hospitals, there are different types of consumers – government, municipal and private. This is the time to make price lists more sensible. For more information, please see our Comments FAQ. No doubt state regulators need to periodically undertake the exercise to reduce the number of categories, as having too many categories creates its own problems. Encouraging the adoption of advanced technologies at various levels through an appropriate regulatory framework and market structure. One must also bear in mind that in most cases, the regulators in India regulate government owned and managed entities, which itself is challenging. 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 Govt. He stated that the Ministry is in the process of preparing three years of tariff rationalization plans for different sectors with the aim to reduce the cost of production through reduction of duties. 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. Global fluctuation: Price of petrol likely to go down, Fuel price adjustments: NEPRA reduces power tariff by 35 paisa, Inflation hits highest level in 16 months. Today, for industries, the tariffs are really high. Technical assistance completion reports describe for technical assistance projects the expected impact, outcome and outputs; conduct of activities; evaluation and achievement of the expected outcomes; an assessment and rating; major lessons; and recommendations and follow-up actions. Retail tariff patterns are also likely to see appreciable variations in the coming years, with tariffs going up in the short to medium term but settling to really low levels in the longer run. A tariff is a tax imposed by a government on imports or exports of goods. In real life, tariffs are a state subject and the regulators will be guided by what the political powers in the states want them to do. Further, this will discipline those who are supplied below-cost power because they know they are being measured. The act, process, or practice of rationalizing. We talk about how the percentage of AT&C losses has come down, but in reality we find that the numbers keep fluctuating. The effectiveness of the regulatory system would depend on the convergence of approaches between these two sets of regulators. Rationalising is always a good and an attractive concept, but the problem is that you have a telescopic system of charging. Lowering of retail tariffs through efficiency and realignment of the generation mix. If Indian industries have to compete globally, they cannot be asked to pay the highest tariffs in the world. 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. We have been going in the opposite direction, charging more for higher consumption and less (or even free) for the smallest consumers. During the last decade, all the 20 fastest export-growth economies have reduced import tariffs, while in Pakistan the trend has been the opposite with an increase of 11% in import tariffs1. Tariff rationalization is especially important in promoting the competitiveness of domestic industries. is a defense mechanism in which controversial behaviors or feelings are justified and explained in a seemingly rational or logical manner to avoid the true explanation, and are made consciously tolerable—or even admirable and superior—by plausible means. Your Company Name, Wind power development in the country started in 1986, with the setting up of the first wind, A growing number of industrial and commercial consumers, who had long been reeling under high utility tariffs, US-based solar module manufacturer First Solar entered the Indian market in 2010 and has since become one, The Telangana State Electricity Regulatory Commission (TSERC) has notified draft TSERC (Deviation Settlement Mechanism and related matters) [...], Power Finance Corporation (PFC) plans to sell bonds worth $1.4 billion to individual investors. The key considerations for tariff rationalisation could include: A realistic assessment of costs of service to various consumer categories at different voltage levels of supply and setting cost-reflective retail tariffs. Summary of Change. Since government and municipal hospitals cater to socially and economically disadvantaged patients,  their tariffs are kept low. This is in view of the complex tariff structure across the states with multiple categories and subcategories and a high level of cross-subsidisation by industrial and commercial consumers. World over, including in India, the regulator is expected to take a neutral position, balancing the interests of all stakeholders. Further, there is inconsistency in the categorisation of certain consumer segments across states. Rationalization means organizing something into a logically coherent system. This has made a heavy capital essential service into a highly uneconomic one, with no surplus generated for regular maintenance and investment. 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. It is also emerging from growing malpractices in the tourism sector of guests being kept in poor quality accommodations like private homes, being given poor food and undercutting of tariff rates by tour operators. According to [...], Falling tariffs and capacity growth augur well for segment, Industrial and commercial users turn to short-term power market, “Significant potential for thin-film deployment”, TSERC notifies draft DSM Regulations, 2020, PFC to sell bonds worth $1.4 billion to individual investors. And is not just retail tariffs through efficiency and realignment of the discom not! Prices are related to volume adds subsidies and `` tariff rationalization Surcharge '' make... 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