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The politics of cement in AP

Our Bureau

HYDERABAD, Jan. 4

SOARING cement prices in Andhra Pradesh and neighbouring States have become a matter of concern for the Andhra Pradesh Government with the Industries Department deciding to convene a meeting of cement manufacturers to discuss the issue.

This comes in the backdrop of allegations by political parties and representations by builders' associations that the cement manufacturers had formed a cartel to jack up prices despite the potential of offering them at much lower rates.

The cement prices had soared from about Rs 85 a bag to Rs 160-170 in around ten months which had become a matter of concern for the construction industry. Based on this development, the State Government had constituted a task force with technical committ ee to study the issue relating to cement prices in the State.

Consequently, the Government decided to interact with the representatives of cement manufacturers, the technical committee which had gone into the cost evaluation study and the Union Government officials and the representative of Bureau of Industrial Cos ts and Pricing, New Delhi to analyse the situation and also see how this could be sorted out if the prices had been actually firmed up due to cartelisation.

The Industry Minister, Mr Vidhyadher Rao, said that the Government did not have any direct say in the cement pricing mechanism following the decontrol of cement from 1989 through a order from the Ministry of Industry and Company Affairs wherein it was de cided to remove price and distribution control of cement with effect from 1989.

The Minister said the rising cement prices were not limited to Andhra Pradesh alone. The situation was no different in Maharashtra, Madhya Pradesh and Karnataka and the prices were lower in Andhra Pradesh, he said.

Since cement had also been brought under OGL list, as confirmed by the Union Government, Mr Rao said if the price of imported cement worked out cheaper than the local product, the Government would not hesitate to encourage imports. It would also impress on the Centre to see how best this could be tackled within the regulatory framework.