The Himachal Pradesh government on Thursday succeeded to some extent to persuade the cement firms to reduce the prices of cement bags.
Cement firms have agreed to reduce the prices, but they refused to cut down the prices for cement in far-flung and tribal areas.
Chief secretary Sudripta Roy held a meeting with the cement firms to discuss the issue related to prices.
There are three main cement producing firms in the state, which included the cement plants set up by Ambuja in Darlaghat, Associate Cement Company in Barmana and two separate plants in Bagehri and Baghal.
All three cement firms account for 11 lakh metric tonnes of cement production in Himachal Pradesh. Of the total cement produced in the state, only 40% is sold in Himachal Pradesh, while the rest goes to different parts.
In the meeting, representatives of three cement firms agreed to bring the cement prices on par with that being sold in neighbouring states of Punjab and Haryana.
The cement firms maintained that the transport cost was a major constraint for reducing prices. Cement produced in Himachal cost about Rs. 340 per bag of 50 kg, while it's being sold at Rs. 275 in adjoining states.
The government has already entered into an agreement with a cement company that agreed to supply cement to the government at the rate of Rs. 155 per bag against the price of Rs. 174 as quoted earlier, which would result in saving of Rs. 18 to 24 crore of the government.
Representatives of Jaypee told government officials that the cost for transporting cement bags from Jaipur to Jammu was equivalent to that from Bagheri (Solan) to the interiors of Chamba district.
“The cement firms have told us that it is not viable for them to reduce the cost of cement bags sold in the interior areas,” Roy told the Hindustan Times.
The government asked the cement firms to work out the actual cost of transportation and production. It is learnt that the cement companies have partially agreed to rework the cost of cement for far-flung areas.
Mounting pressure, the government had warned the cement firms of action under different provisions of environmental laws. The cement firms had sought a week's time to work out the final cost for cement in Himachal. However, the cement firms have unanimously agreed for not increasing prices in near future.
The Himachal Pradesh government has given its nod for enhancing certain goods carried through road tax (CGCR) on the cement bags.
This for the first time in five years that the government had proposed to increase CGCR on cement. Last time, the CGCR was increased in 2008.
According to the new rates approved by the government, CGCR on cement has been increased from Rs. 6 per 50 kg bag to Rs. 7.5.