Property Plus
Coimbatore
Steps to stem cement price rise pay off
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The government scheme to sell cement at concessional price has met with good response, writes T. Ramakrishnan
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Photo: M.A.Sriram
Brought to order:With the implementation of the new scheme, cement supply has been streamlined.
Psychological impact, rather than physical, is the major outcome after three months of working of the State Government’s scheme of selling cement at a rate of Rs. 200 a bag. This is the assessment of a cross-section of government officers and construction industry on the cement price front.
“We have been able to stem the rise in the prices of cement,” says K. Shanmugam, Secretary of the Food, Civil Supplies and Consumer Protection Department. (The scheme is being implemented through the Civil Supplies Corporation, which comes under the control of the department.)
Opinion
M.K. Sundaram, Chairman, southern centre of the Builders’ Association of India, echoing a similar opinion, says the scheme has provided an additional window for retail consumers to procure cement.
This has acted as a check on private cement manufacturers. A senior official of the Industries Department says that Andhra Pradesh and other States have showed keen interest in the scheme and are planning to adopt it.
It all started in early January when concerns were expressed in several quarters over the rise in the prices of the material, an important input for construction.
Meeting
The State Government, after a high-level meeting chaired by Chief Minister M. Karunanidhi, said it would have no option but to take over private cement factories located in the State if the factories’ managements did not bring down prices.
Immediately, a delegation of the cement manufacturers called on the Chief Minister and the Government came out with the scheme of selling cement of the Portland Pozzolona Cement (PPC) variety at Rs. 200 a bag.
The manufacturers had also offered to supply one lakh tonnes of cement a month.
Features
As per the scheme, people of lower and middle income groups who are building houses not exceeding 1,000 sq.ft. are eligible to get cement at concessional price.
When the scheme was launched in the third week of January, 100 bags of cement were permitted per person. To purchase cement, one had to get an allotment letter from the Head Quarter Deputy Tashildar (HQDT) based on the building plan. Subsequently, in February, the ceiling of 100 bags was enhanced to 200 bags. The condition of getting the allotment letter from HQDTs was withdrawn. On the basis of approved plans, cement could be obtained from the Civil Supplies Corporation’s taluk godowns. Only those who do not possess approved building plans have to produce allotment letters from HQDTs.
The ceiling of 200 bags was further increased to 400 bags. Consumers have also been permitted to take cement in 8 instalments at the rate of 50 bags at a time.
Repair works
For maintenance and repair works, 25 bags are allowed without any condition and on remittance of cash in the godowns. There are plans of liberalising the conditions of the scheme.
K. Phanindra Reddy, Managing Director of the Civil Supplies Corporation, says the reception to the scheme has improved over the period. Earlier, only 100 tonnes were sold a day. Now, it is 1,500 tonnes a day.
Moreover, not a single complaint has been received by the administration with regard to quality of cement or non-cooperation of the staff at the godowns or diversion of the product.
There are sufficient stocks available with his organisation. He adds that the response to the scheme is extremely good in the southern districts. Coimbatore, Dharmapuri, Nagapattinam and Tiruvannamalai are among the other districts that have reacted favourably.
Imported cement
Apart from the sale of domestically-produced cement, the Government has decided to import one lakh tonnes of cement belonging to the Ordinary Portland Cement (OPC) variety for making it available to bulk buyers and to those who build houses of more than 1,000 sq. ft.
The import from Pakistan is being made through the Tamil Nadu Cements Corporation and MMTC.
The price is Rs. 160 per bag (on high seas). It is also supplied at the rate of Rs. 220 per bag inclusive of taxes at the sites of consumers in and around Chennai and Tuticorin districts.
Consignment
The consignment is coming to the Chennai and Tuticorin ports in a phased manner. As on April 21, 9,625 tonnes were received at the two ports. The quantity sold was 8,925 tonnes.
Notwithstanding the positive assessment of the scheme, there are people who have different views. R. Desikan, trustee of the Consumers’ Association of India, says the Government can ensure that cement is sold at a much lesser rate. Input cost of the cement production has not gone up in recent years. For instance, there is no rise in the power tariff.
Y.S. Kannan, builder, says the price of cement can be fixed at Rs. 160 per bag, even after allowing for net profit.
Steel
J.R. Sethuramalingam, former State chairman of the Builders’ Association, wants the State Government to come to the rescue of builders as the price of steel has gone up in an unprecedented manner.
The recently-evolved price variation mechanism for fresh government schemes should be extended to ongoing schemes. The possibility of importing steel can also be explored.
Senior officials in the government say the latest schedule of rates will take care of the concerns of the construction industry with regard to the new projects. Steel import is not as realistic an option as cement import.
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