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Unjustified Increase of Prices of Steel and Cement Due to the Cartelisation of Manufacturers

In Business
February 12, 2021

KOCHI:
Construction industry contributing maximum GDP growth and accounts for more than 50% of total plan outlay. It employs more than 60 million workers and next only to agriculture in employment it has forward and backward link with more than 400 allied industries.

Cement is one of the major construction material used in all segments of construction industry and is a basic input for construction sector, but cement manufacturers are deliberately not using the installed capacity of cement production with the purpose of creating an artificial shortage of cement in the market to influence the price. In case No.29/2010 filed by BAI conclusively found the existence of cartel arrangements among the cement manufacturers, resulting the manipulation of sale price of cement and imposed a penalty of Rs.6307 Cr. on 10 cement manufacturers and also issued a cease and desist order.

Regulatory Authority
Parliamentary standing committee of Ministry of Commerce presented its 95 the report strongly recommends that the Government should establish a statutory regulatory authority to regulate the price of cement to curb the tendencies of market dominance, under utilisation of capacity and artificial scarcity.