Himachal wants cement put on controlled commodity list

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SME Times News Bureau | 03 Jan, 2012
Himachal Pradesh Chief Minister Prem Kumar Dhumal Monday asked the central government to include cement in the controlled items list within the Essential Commodities Act to check its rising prices.

In a letter to Prime Minister Manmohan Singh, Dhumal said cement produced in the state was available at cheaper rates in neighbouring Punjab and Haryana than in the hill state.

"In 2002, cement was decontrolled under the Essential Commodities Act, 1955. It was presumably done to facilitate market competition in cement production and marketing on the analogy of government of India's general policy of economic liberalisation," he said.

This policy, the chief minister said, had harmed consumers instead of benefiting them.

"In a free market economy, it is assumed that the market forces would throw up the ideal retail selling price of cement at any given location on account of competition amongst several suppliers. Such ideal free market conditions did not exist at any locations in Himachal," he said.

"The cement companies have been fixing retail selling prices at various locations in the state in an arbitrary and irrational manner and as a result, an ironical situation has arisen while three major cement producing companies were located in the state," wrote Dhumal.

He urged the prime minister to bring pricing back within the purview of the Essential Commodities Act.

The state has four mega cement plants - Barmana (ACC), Darlaghat (Ambuja), Rajban (CCI) and Bagha (Jaypee). The aggregate capacity is 10.66 million tonnes a year

During the recently concluded state assembly session, Food and Civil Supplies Minister Ramesh Dhawala said cement rates in the state vary from company to company and the freight rates were high.

He said a bag of cement should not cost more than Rs.250, inclusive of all taxes. But Ambuja Cement was selling a bag of cement from Rs.309 to Rs.350, ACC from Rs.305.98 to Rs.354, and Jaypee from Rs.295 to Rs.326.

The cement companies say high transportation cost in the hill state was the reason behind the higher prices.