Govt asks industry to cut cement prices; builders demand rejected

New Delhi, May 2 (UNI) Refusing to outrightly toe the builder lobby line for ban on exports, the Government today asked the cement manufacturers to roll back their prices in the next two weeks in the face of a shoot-up in prices by as much as 50 per cent in the past four to five months.

Secretary in the Department of Industrial Policy and Promotion Ajay Dua, assisted by Chairperson, Tariff Commission Charushila Sohoni, called a meeting of the Builders' Association and the Cement Manufacturers' Association and asked the latter to decide steps for lowering the prices.

''The situation would be reviewed within a fortnight'', Dr Dua said after the meeting.

However, the government rejected the demand from the builders for slapping an outright ban on the cement exports. ''The government would not like to take a view on this suggestion at present as India should not lose its export markets which took time to develop'', Dr Dua said.

Representatives from the Ministries of Coal, Power, Railways, Consumer Affairs, Urban Development and Petroleum and Natural Gas and all other stakeholders attended the meeting.

The builders informed the government that there had been a steep increase in prices; as much as 50 per cent in the last four to five months. The prices had started increasing from November 2005 but the sharp rise came about in the recent few months. The increase was particularly sharp in the Northern and Western markets, compared to the South and the East.

They said the cost of raw materials has not gone up significantly during this period nor had the taxation or railway freight increased in relation to cement.

The cement manufacturers on their part explained that they were required to buy more coal in the open market which was being given by Coal India Limited through e-auctions, and that e-auction prices were on an average, 40 per cent higher than notified prices.

Secondly, there had been acute shortage of power and not only had the price of power gone up by 10 to 15 per cent, but also they were required to set up either their own captive power stations or use diesel, the cost of which had also gone up.

Thirdly, the Supreme Court order of November 2005 that trucks could not be overloaded compounded the problem, according to the cement manufacturers, who said that the freight cost had also gone up.

UNI PC RA VC1925