Hyderabad, March 13 (IANS) Industry in Andhra Pradesh is reeling under unprecedented electricity cuts and the Confederation of Indian Industry (CII) has warned that workers may lose their jobs.

The around 30 percent power cut has got the industry worried at a time when it was just recovering from losses it suffered during the Telangana agitation.

'It is an unprecedented situation with 25 to 30 million units (MU) power cut daily. For the industries, it is a three-day power holiday in a week. So there is a 72-hour power cut in a week,' CII AP Chapter president Y. Harish Chandra Prasad told IANS.

'The industry is not in a position to put up with this power cut, especially small and medium industries. The workers will lose their jobs. They will be on the streets,' he warned.

The state supplies free electricity to small farmers for seven hours a day. Authorities say the demand in the state is is for 250 MU everyday while there is a shortage of 25 MU. However, the actual shortage could be much more considering the 30 percent power cut on the industry.

The agriculture sector is not getting the required electricity while authorities have imposed two-hour cuts every day in the state capital and major cities, five hours in towns and six hours in the villages.

Prasad blamed the situation on faulty planning. 'We had expected that once the gas production starts there will be 10 percent increase in power production and it will be sufficient to meet the demand. The government called the tenders (for gas-based power projects) but failed to finalise it,' he said while pointing out that neighbouring Tamil Nadu and Karnataka have managed things well.

Prasad noted that the industry was cross-subsiding electricity to domestic and agriculture sectors. The state government owes a whopping Rs.12,000 crore to power distribution companies, which have no funds to buy power from outside.

Earlier, Governor E.S.L. Narasimhan assured the industry that he would personally look into the problem.

The governor told the industry that the state government was exploring the option of merchant power plants, whereby players can sell power in the market, to meet industrial demand. 'We are trying to see how best we can do this,' he said.

Prasad, however, told reporters that merchant power plants was a long-term plan.

He said CII was holding discussions with the government on the merchant power policy, which is currently at the approval stage.

'The developers who have no power purchase agreements with the government can set up such plants with balance sheet financing and by taking a risk. If there is demand we can buy power produced by them, otherwise they will sell it outside,' he said.