The Hindu : Business : Cement, car prices raised

Online edition of India's National Newspaper
Friday, Mar 02, 2007
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Business

Cement, car prices raised

Higher excise and increase in education cess passed on to consumers

NEW DELHI: The cement industry on Thursday hit back at the Government with a Rs. 12-per bag hike in prices after the budget proposed a dual excise duty on the product with an aim to check its prices.

Ignoring Finance Minister P Chidambaram's call to hold the price line, the industry said it had no other option but to pass on the increase in the excise duty to consumers.

"The excise duty has been raised for cement priced above Rs. 190 per 50 kg bag and companies have no option but to raise prices,'' Cement Manufacturers Association (CMA) Vice President and Shree Cements Managing Director H. M. Bangur told PTI in Kolkata. The industry disagreed with Mr. Chidambaram's suggestion that they were overcharging.

"We are concerned with inflation, but at Rs. 190 retail price, we will not be able to service our commitment to investment and service debt. We are not earning undue profit,'' JK Cement CFO A K Saraogi said. "The increase in price has been effected across the country,'' Cement Stockists and Dealers Association (Bombay) President Sanjay Ladiwala said.

Following the hike, the wholesale price of cement in the Mumbai market would go up to Rs. 233 a bag with Rs. 5 plus or minus depending on the brand, Mr. Ladiwala said.

A day after Finance Minister P. Chidambaram announced imposition of one per cent additional education cess while bringing down the import duty on auto components, the auto industry on Thursday passed on the impact to customers.

While auto majors like Tata Motors, Ford and Hyundai announced that they would increase prices, the luxury car maker Skoda said it would pass on the benefit of cut in the import duty by slashing up to Rs. 24,000 on its models.

A Tata Motors official said the company would hike prices across its passengers vehicle models by between Rs. 500 on an Indica to Rs. 1,200 on a Safari.

General Motors also said effective Thursday it would hike prices across all its models — from hatchback Chevrolet UVA to luxury sedan Chevrolet Optra by between Rs. 600 and Rs. 1,500.

Hyundai also said it would be hiking the prices, but said it was still working out the quantum. — PTI

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