Govt puts pressure on cement producers

"We are in the process of persuading the cement industry to roll back prices," Chidambaram told reporters here. Leading producer ACC has already announced that it would "hold the cement prices over the coming 2-3 months". The company said it would be engaged "in an open dialogue with the government to explore viable solutions to combat inflationary trends that have disproportionately increased its input costs".

Kolkata-based Shree Cement said it has already reduced the prices in Rajasthan, Haryana and Uttar Pradesh by Rs 2-5 and in Gujarat by Rs 7 per bag of 50 kg in May.

J K Lakshmi Cement, big player in north India, said it is also inclined to hold the price line. A top official of Barak Valley Cement, which is a dominant supplier in Assam, Tripura and Mizoram, said, "If others reduce prices, we will also reduce it to stay in the market".

However, the Cement Manufacturers Association (CMA), apex industry body, remained non-committal. "CMA has nothing to do with prices. Prices are determined by the market," CMA President, H M Bangur said.

When asked whether others would follow the ACC example, Bangur said every company is free to take its own pricing decision.

However, there is no possibility of any rise in prices. "If one company decides not to hold the prices, it would be very difficult for others to raise the rates," he said adding that industry is working along with the government to contain the inflation.

Prices are presently ruling between Rs 200-260 per bag across the country with rates being higher in southern and western parts of the country.

Major steel producers have already announced reduction in prices by an average Rs 4,000 a tonne under the government initiative at the highest level.

Department of Industrial Policy and Promotion is said to have apprised the PMO and Finance Ministry about its talks with the cement manufacturers. It has also suggested some administrative and fiscal measures.