Rein in cement prices: Govt

New Delhi: Concerned over the steep increase in cement prices, the Government on Tuesday came down heavily on the manufacturing companies and asked them to work out ways within a week's time to cut prices.

Cement prices have gone up from an average level of Rs 135-140 per bag of 50 kg to around Rs 205-210 per bag during the past six months.

At a meeting called by the Department of Industrial Policy and Promotion (DIPP), the Cement Manufacturers Association has been asked to call a meeting of its members urgently and decide on steps for lowering of prices, instead of waiting for the rainy season, when cementprices tend to fall. The meeting was convened following complaints from builders against the sharp increase in prices of cement.

``We think that the nearly 50 per cent increase in cement prices since November 2005 is abnormal. The prices have increased more than the increase in the input cost,'' Mr Ajay Dua, Secretary, DIPP, told newspersons after meeting with cement manufacturers and the Builders' Association of India.

'The cost has roughly increased by around 15 per cent, but increase in prices in certain cases has been as high as 40-50 per cent; on an average it was about 30 per cent. Therefore, there is a need to take corrective measures by the manufacturers to bring down the prices,' he said.

The cement industry has been witnessing a boom period following increased spending in construction and infrastructure sectors. Cement output increased by 11 per cent from 127.57 million tonnes (mt) in 2004-05 to 141.81 mt in 2005-06. Exports during 2005-06 went up by more than 47 per cent from 4.07 mt in 2004-05 to 6.01 mt during 2005-06. This surge in exports had led to builders' associations demanding ban on cement exports in the face of high domestic prices.

With a booming market the cement industry has also increased its capacity from 153.85 mt in March 2005 to 159.80 mt in March 2006.