Date:26/04/2008 URL: http://www.thehindu.com/2008/04/26/stories/2008042654790600.htm

Andhra Pradesh

Rs. 210 for a bag of 50 kg cement in Andhra Pradesh

Special Correspondent

HYDERABAD: After two hours of talks with the cement manufacturers here on Friday, the Andhra Pradesh government achieved a breakthrough by extracting an assurance from them to sell cement at the ex-factory price of Rs. 200 for a 50kg bag.

However, the government allowed some flexibility with an additional cost of upto Rs. 10 a bag towards transport depending on the distance to be covered from the factory to the point of sale.

The accord was reached when representatives of all the 34 cement factories in the State, in response to the government’s invitation for talks, met Chief Minister Y. S. Rajasekhara Reddy and briefed him on the factors that led to the price rise. Later, the Group of Ministers comprising K. Rosaiah (Finance), K. Ramakrishna (Commercial Taxes) and G. Vinod (Labour), held discussions with them.

Mr. Rosaiah told reporters later that the manufacturers had agreed to supply cement for Rs. 145-160 a bag for Indiramma programme during 2008-09 also and clear the backlog for 2007-08.

Going by explanations given by the manufacturers, the Minister gave them a clean chit when he said it appeared that there was no cartelisation to increase the price by cutting down production which remained at 99 per cent of the capacity. The manufacturers had broadly agreed to meet the requirement within the State first before taking the commodity outside.

Mr. Rosaiah, however, held that there was no change in the government’s decision to seek delegation of powers from the Centre under Industrial Development & Regulation Act of 1951 to restrict movement of cement. Nor would there be a change in the stand to refer the issue of cement and steel prices to MRTP Commission. Mining licences would be cancelled if there was no mining activity.

He ruled out possibility of the government reducing sales tax on cement as there was no such provision in the VAT regime. He rejected suggestions for importing cement on the ground that its price would be as high as Rs 250-270 a bag as happened in Tamil Nadu.