MRTPC to deal with cement firms
Govt eases import norms; says it is up to the Monopolies and Restrictive Trade Practices Commission to stop cartel.business Updated: Jul 27, 2007 01:50 IST
The government on Thursday said it is up to the Monopolies and Restrictive Trade Practices Commission (MRTPC) to take action against cement “cartels”, even as it announced plans to ease import rules to rein in high domestic prices.
“The MRTPC can take any action according to its provisions to deal with cement firms,” Department of Industrial Policy and Promotion Secretary Ajay Dua said on the sidelines of a CII seminar, adding, the government would relax certification norms to make cements imports easier and help bridge the demand-supply gap.
Prices would fall once imports began to arrive, he added.
“If the economy grows more 9 per cent, the growth in demand for cement will be 10 per cent, while supplies from domestic firms have been only increasing by 6-7 per cent,” Dua said. “We hope to bridge it partially through imports,” he added.
The government had cut duties in April, to increase supplies. However, shipments from Pakistan could not be distributed as foreign firms did not meet the certification norms issued by the Bureau of Indian Standards (BIS).
According to the present norms , a cement firm can sell its products only after BIS officials inspect its plants and issue clearance certificates. These rules would be relaxed and BIS could be allowed to issue foreign manufacturer certificates to overseas cement firms, within two months of an application being lodged, Dua said.
So far Pakistani firms have expressed the most interest in exporting to India.
Cement prices shot up by close to 10 per cent in June from the year-ago period.
The MRTPC had issued notices to 14 cement firms, including Grasim, ACC and Ultratech, after its investigative arm, the Director General of Investigation and Registration, pointed toward cartelisation and “exorbitant” increase in prices.
While Cement Manufacturers Association (CMA) has maintained it has no role in price fixation, the DGIR had said that “Cement manufacturing companies met and discussed marketing strategies, including prices, at a CMA forum, to increase prices without any fear of competition.”
Companies against whom the MRTPC probe has been initiated include ACC, Binani Industries, Birla Corporation, Dalmia Cement, Grasim Industries, Gujarat Ambuja, JK Cement, Indian Cement Ltd, NCL Industries, OCL Industries, Saurastra Cement, Ultratech and Zuari Cement.
MRTPC’s action is among a series of measures taken by the government and the commission to rein in cement prices.