India Higher cement prices worry builders, contractors

The BAI plans to make mass representations and organise State-level protests

Builders and contractors here have expressed concern over the increase in cement prices in the last few days.

According to K. Viswanathan, chairman of the Taxation Committee of Builders’ Association of India, the cost of one bag of cement (50 kg) is up by nearly ₹70 for bulk purchases in Coimbatore and ₹50 a bag for retail purchases.

“There is no immediate reason that could have triggered the price increase,” he says. If a person is constructing a house without employing a contractor or builder, he will buy cement from the retail outlets. A 1,000 sq.ft house will require about 400 bags. The prices increase only because of cement will be ₹20,000, he says.

Though there is no actual shortage, because of the price hike, there is a shortage-like situation. Further, the Ready Mix Concrete suppliers have also increased price. Cement is the main material they use. The price of a cubic metre of RMC used to be ₹4,000. Now, it is up by ₹500 – ₹600, he said. The costs of large-scale projects will escalate with higher RMC and cement prices. Construction activity is just picking up and higher input costs, especially for cement, will affect the sector, he added.

In the case of time-bound projects, the contractors will have to bear the additional cost and government projects will also be affected. The Builders’ Association of India (BAI) plans to make mass representations and organise State-level protests.

A. Pugazhendi, president of BAI, said the housing and real estate sector consumes nearly 65 % of cement produced, followed by infrastructure sector at about 20 %. Contractors usually work on fixed rate, fixed time basis and hence have to bear the brunt of higher cement prices.

The Association had taken up the issue earlier too with the Competition Commission of India, when there were steep price hikes. The BAI appealed to the Government to constitute a Cement Regulatory Authority to streamline cement pricing.

Publish by The Hindu