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No bilateral concessions: Madhya Pradesh power tariff case holds valuable lessons

Given high infrastructure costs in India, or rigid labour laws and even high tax rates, governments find it easy to work out bilateral deals with big, or new, investors. That practice, however, could increasingly be challenged legally as preferential power tariffs are being done right now in Madhya Pradesh. The case dates back to 2016, when the MP State Electricity Regulatory Commission (MPSERC) had approved differential tariffs for new industrial units. The regulator had given a rebate of Rs 1 per unit or 20%, whichever was lower, on energy charges for new connections in the industrial category. After this was challenged in 2017, the central appellate tribunal for electricity, APTEL, struck down the differential tariffs, saying this was a .....

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