Cement producers assure govt to cut prices

"We have talked to cement producers and they have assured us that very soon in the course of 2-3 days, after discussing among themselves, they would put forward their proposals of how best the cement prices can be brought further down," Minister of State for Industry Ashwani Kumar told reporters here today.

 

The cement manufacturers, along with steel producers, who have been accused of raising prices through cartel, would get back to the government after discussing to what extent they could cut prices.

However, the cement manufacturers could not be contacted on the issue. The assurance from manufacturers came after the government announced to take tough action against them, besides banning exports and allowing duty-free import of cement.

Through these measures, he said, about 365,000 tonnes of cement has been made available in the market. The cement prices have gone up from about Rs 150 a 50-kg bag to about Rs 220-260 per 50-kg bag in the past two years.

"In the course of coming few days, significant reduction in prices of cement can be expected," the minister said. On the industry's demand to lower tax burden, he said government was "open to consider every measure."

He further said the ministry had submitted a proposal to the finance ministry in this regard and a final decision would be taken by the Cabinet.

Accusing steel and cement producers of behaving like a cartel, Finance Minister P Chidambaram had recently said in Parliament that the government was considering to take all possible steps to bring down prices.

In a meeting with Prime Minister Manmohan Singh, the steel producers had yesterday assured to bring down prices by up to Rs 4,000 a tonne.

The cement producers have been under pressure to reduce prices by Rs 10-20 a bag, as rise in prices have badly hit the construction sector and many government-funded road and railway projects.

Kumar, who is holding talks with the cement producers, said: "We have discussed extensively with the representatives of the Cement Manufacturers Association. They have responded constructively and positively to suggestions of voluntarily cuts in prices."

The government has impressed upon the industry that it was "in the interest of all stakeholders that prices remain competitive... for which it is advisable to shun windfall profits."

He also said that about 52,000 tonnes of cement would reach from Pakistan alone in the next two months.