The Hindu Business Line : Cement needs concrete measures

Grey cement is the only product where excise duty is charged on MRP basis without abatement. Even if abatement is provided, government revenues will get adequate protection. In a 2005 report, the NCAER also recommended an ad valorem duty with 55 per cent abatement on cement. Consumers will benefit as the industry will pass on the lowered cost.

The Central and State governments must promote concrete roads instead of bitumen roads. The maintenance cost of concrete roads is quite low compared to the bitumen roads, the erosion is low and they have a longer life. Also the wear and tear of motor vehicles is low when they ply on concrete roads. The move will also lead to savings in fuel cost.

The Government must focus aggressively on infrastructure development. That will give a boost to the cement industry and also help in revival of the economy.

Lift export ban: There is no impact on inflation (weightage of cement in the WPI is 1.7 per cent). Lifting of the export ban will encourage investment in new capacities. The Indian cement industry will otherwise loose out the opportunity in West Asia to countries such as Pakistan.

Indian companies pay excise duty while imported cement is exempted from Countervailing Duty. The CVD must be re-impose CVD on imports to create a level playing field.

Supply of coal at linkage price to the cement industry was cut to 75 per cent recently. Coal India modified the commitment in the fuel supply agreement (FSA) to 45 per cent at linkage rates, which will further increase the energy costs. Many cement plants are completely dependent on imported coal. The Government should immediately restore 100 per cent coal linkages and allocate coal plants to cement industry (both existing and new) on priority basis.

Puneet Dalmia, Managing Director, Dalmia Cement (Bharat) Ltd.