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Cement-makers not to cut prices

BS Reporter  |  New Delhi 

The cement manufacturers today informed the government that there was no scope for a cut in prices, a senior industry ministry official said.
"They (cement manufacturers) are not ready to reduce prices," the official told reporters after a meeting between the government and cement manufacturers. He said the government wants cement firms to restore the pre-Budget price level.
"We know how the sales and profits of cement companies have gone up in recent times. I hope that the industry will discuss the matter and come up with a proposal to slash prices," Finance Minister P Chidambaram said, while speaking to the media after meeting cement-makers. This is the second time the Union minister has asked cement firms to moderate prices.
Manoj Gaur, president of the Cement Manufacturers' Association and executive chairman of Jaypee Associates, said the finance minister had called us to discuss a moderation in prices. "We have given a proposal," he said, and refused a further comment.
In its fourth meeting with the government, cement companies are believed to have resisted all attempts by the former to cut prices.
Companies had raised cement prices by Rs 10-12 per 50-kg bag after the government introduced a dual duty structure in the Budget.
It reduced the excise duty from Rs 400 per tonne to Rs 350 per tonne for cement selling at price not exceeding Rs 190 per 50-kg bag. However, for cement selling at prices above this duty was hiked to Rs 600 per tonne.
The government's efforts to reduce cement prices is directly related to its decision to contain inflation.
Cement has a weighting of 1.73 per cent in the wholesale price index (WPI) and has been witnessing inflation levels of 10-15 per cent in recent times.

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First Published: Fri, March 23 2007. 00:00 IST