Date:23/03/2007 URL: http://www.thehindu.com/2007/03/23/stories/2007032306001700.htm

Business

Cement makers refuse to reduce prices

Special Correspondent

NEW DELHI: The Centre's efforts to bring down cement prices to rein in inflation came a cropper on Thursday with the industry refusing to roll back prices to the pre-Budget levels.

According to official sources, the cement producers told Finance Minister P. Chidambaram at a meeting here that nothing much could be done on reducing prices while citing the reason that after "struggling" for about 15 years earlier, the industry had started faring better only since the second half of 2005.

Maintaining this line at the meeting, the cement producers remained adamant and did not suggest any formula for price reduction even though Mr. Chidambaram had invited the industry for talks to devise ways of scaling down cement prices to pre-budget levels.

However, interacting with newspersons after the meeting, Mr Chidambaram observed that the cement producers were divided over the issue and a section of the industry was keen to cooperate with the Government for checking the rise in prices.

"I get the impression [that] there are both views in the industry. One is [a] more sober view that we must help the Government control inflation. The other view seems to be more hawkish... It is my hope they will discuss among themselves and come back with some proposals to the Government. I have asked [the] Industry Secretary to keep in touch with them, if they have any proposals," Mr Chidambaram said.

Following the budget which clamped a differential excise tariff on cement to force a reduction in prices, this was the second time that the Finance Minister had called the manufacturers for a dialogue. Briefing the media on what he told the cement producers during the discussions, Mr Chidambaram said: "We have information how much your [cement producers] sales have increased, [by] how much your PBT (profit before tax) has increased, [by] how much your PAT (profit after tax) has increased. So you should come forward with some proposals [on moderating cement prices]. The cement producers refused to be drawn into any argument either way. "I do not have any comment to make at this point,'' Manoj Gaur, President of the Cement Manufacturers Association (CMA) and leader of the delegation, said while talking to newspersons after the meeting with the Finance Minister and other top officials.