October 11, 2008

Indian government may force cement makers to curb prices

It is reported that, after forcing steel makers to roll back prices, Indian government is now aiming the gun at cement in its fight against inflation and is planning a slew of steps, if the cement industry fails to hold prices.

Dr Ashwani Kumar union minister of state for industry said that "We have talked to cement producers and they have assured us that in the course of the next 2 days to 3 days they would reduce prices after consultations among themselves. They will come forward with proposals on how best cement prices can be brought down further."

Dr Kumar said that "Cement firms have cited certain constraints, including the tax structure. We have taken them up with the finance ministry and hope to resolve them soon. The government is not helpless and has means to ensure prices are brought down. More measures are in the offing."

Meanwhile, Mr HM Bangur president of the Cement Manufacturers’ Association said that excise duty on cement was calculated on retail price unlike other commodities where ad valorem rates based on manufacturing cost were used. He added that "If the 20% ad valorem rate is fixed for cement, prices of cement can come down by INR 15 per bag."