Cement firms defy govt, not to roll back hikes

Cement makers today turned down the government's call to rollback the price hikes announced after a proposal to impose dual excise duty in Budget 2007 saying they were not in a position to absorb increase in taxes.

The cement industry has informed the Department of Industrial Policy and Promotion (DIPP) secretary Ajay Dua that it was not in a position to absorb the additional excise and other levies.

Earlier in the day, Finance Minister P Chidambaram had said that while government was not resorting to price control, it has to take effective steps to moderate the prices.

Chidambaram, in his budget speech on February 28, proposed to reduce excise duty on cement by Rs 50 from Rs 400 per tonne if it is sold at Rs 190 per 50 kg of bag, but raise it by Rs 200 per tonne to Rs 600 per tonne if sold at higher prices.

The industry promptly passed on the entire increase to the customers the following day by raising retail price by Rs 12 per bag.

In the meeting with the cement industry, Dua broached the possibility of manufacturers cutting prices, but received no positive response.

Cement has been one of the main commodities under government watch for controlling inflation.

While cement manufacturers are standing firm, steel makers have announced cut in prices.