CM Pushes Against the Odds to Introduce Limits on Cement Prices

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During the last month, CM, N Chandrababu Naidu along with his ministers has been busy holding meetings with some of the major cement manufacturers of India, in order to curb the manipulation of cement prices through cartelization. According to the sources, the companies that were invited to these meetings include The Ramco Cement, Ambuja Cement and Ultratech Cement. The main agenda of these meetings was to decide on a cap for the selling price of cement in the AP market.

Andhra Pradesh government’s Communication Advisor, Parakala Prabhakaran said that the people in the low income groups who intend to build houses are extremely upset about the high prices of cement. He added that with a number of government projects too in the pipeline, the demand for cement in the state is about to rise. Further he said that the steep rise in the cement prices has been a matter of concern for the state Chief Minister, which is why he has directed his team of ministers to take a tough action against the miscreants.

Following its formation, the state government has been instrumental in the construction of internal cement roads spanning close to 5000km along with a number of state highways. A number of projects are in the conception stage and will soon be launched. Also the AP government is all set to begin the construction work of the new state capital of Amaravati, which is why the sudden rise in prices has become a matter of concern.

While the average price of 50kg cement bag across India is INR 310, it amounts to INR 350-400 in Southern parts of India. According to Gummi Ram Reddy, the President of Confederation of Real Estate Developers Association of India (CREDAI) it has been noted that during the month of April, the price of cement was increased by more than INR100/bag in the states of Andhra Pradesh and Telangana. He added that this is all the doing of the cement manufacturers who have formed a group and are raising the prices as per their convenience.

If media reports are to be believed, the price of cement bags in the southern region has witnessed a whopping rise from the reasonable INR200-250 during the month of March.

Experts point out that the steep price rise of cement will not only effect the construction industry which is the major consumer of cement in the state amounting to 20% but will also impact the general public. On the other hand, the cement manufacturers justify the price rise as the result of the increased cost of production as well as that of pet coke and freight. However, the analysts point out that the input costs for all cement manufacturers is more or less the same. Thus the high price in Southern India alone is in no way justified.

Prabhakaran said that they do not want the cement manufacturers to incur losses. However, their reason for the price hike is unconvincing which is why they have approached the major cement manufacturers in order to know their point of view.





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