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Realty sector badly hit by soaring cement prices
The steep hike in cement prices dealt a big blow to the already moaning realty sector post demonetisation. The government’s apathy towards the cement industries makes them stronger and dictate terms. From the beginning of the month, cement prices began increasing and have shot up to almost Rs 350 to Rs 410 per 50-kg bag depending on the quality.
Tirupati: The steep hike in cement prices dealt a big blow to the already moaning realty sector post demonetisation. The government’s apathy towards the cement industries makes them stronger and dictate terms. From the beginning of the month, cement prices began increasing and have shot up to almost Rs 350 to Rs 410 per 50-kg bag depending on the quality.And, most importantly, this price hike is confined only to the two Telugu states. Adding fuel to the fire, steel prices have also gone out of reach of common man.
Highlights:
- Surprisingly, the cement prices have increased only in the two Telugu states
- Local steel prices have also been hiked on par with superior Vizag and SAIL steel prices
As a result, several constructions came to a standstill. People are just waiting and watching the trends in prices with a hope that the government will take action and the prices will come down.The existing scenario causes unemployment of construction workers and their migration to other works or neighbouring states where cement is available at much lower prices.
Total production capacity of cement industries in both Telangana and Andhra Pradesh is 70 lakh tonnes per month. The production is more in these two states as lime stone is extensively available here only. But, the cement dealers are saying that out of the total capacity, only 40-45 per cent is being produced for the last 20 days. And the requirement is only 15-20 lakh tonnes in the two states. So all the remaining stock is going to the neighbouring states, where it is available at a much lower rate. By using the natural resource of limestone in these two states, they are deceiving the people here, the dealers argued.
Both the dealers as well as builders were saying in one voice that cement industries formed into a syndicate and challenging even the governments. The president of Tirupati Chamber of Commerce A Manjunath, told The Hans that the industries are giving the cement for government constructions at Amaravati at Rs 240 per bag and for Polavaram Project at Rs 250 per bag as the Chief Minister and finance minister asked them to supply at that rate. When they get profits at that rate, why they have increased the price abnormally in the market, he questioned.
To create artificial scarcity, they stopped dispatches from the midnight of April 2. He said that industrialists were blackmailing them to sell A grade cement at Rs 400 plus per bag, otherwise, cement will not be supplied. At any price the margin for local traders will not be changed. Why the two governments were hesitating to take action against the cement industries, he asked.The national committee member of CREDAI P Rajasekhar Rao wondered when there was no demand from real estate sector, how can cement prices go up.
He said that the non-trade cement rate in Raipur is Rs 230 per bag. In Kolkata, the best quality cement is being sold at Rs 290 per bag. “The government is asking to go for ‘Affordable housing’ under housing for all scheme. When steel prices increased by Rs 12,000 per tonne and cement prices by more than Rs 100 per bag how is it possible to give a house at Rs 6.5 lakh to weaker sections?,” he said.
The CREDAI is mulling to form a JAC and fight against the increasing prices of cement. They want to meet the CM in this regard and will seek permission to import cement from South Korea or China, from where they can get a bag at Rs 180 to 200, and save up to 50 per cent.
By V Pradeep Kumar
