Cement makers allege cartelisation among builders; seek Centre's intervention

Unfortunately, no concrete action has been by theadministration to rein them in and their profiteeringapproach, Srinivasan said in the memorandum.Confederation of Real Estate Developers Association ofIndia and Builders Association of India BAI are twoassociations that represent the real estate sector in thecountry.Giving an example, Srinivasan said, the major cost offlat price being land, the association made a check on theguideline rate for land in high end areas of Chennai.It is Rs 10,000 per square foot.

Cement manufacturers on Tuesdaysought the Centre's interventionto end the allegedcartelisation by builders who were adopting a 'profiteeringapproach.' The manufacturers also alleged there was a lobby amongbuilders and there was no administration to rein them in andtheir profiteering approach.

The comments come days after Union Road TransportMinister Nitin Gadkari had said the big players in the steeland cement industry were indulging in cartelisation to jack upprices.

Speaking at an event in Mumbai recently, Gadkari hadsaid, ''regarding steel and cement, this is really a problemfor all of us. Actually, I feel this is a cartel by some bigpeople who are doing cement and steel''.

Noted industrialist N Srinivasan on Tuesday said theSouth India Cement Manufacturers Association representing thetraders from the southern parts of the country was formed inDecember 2020 with an objective to act as an interface betweencement manufacturers and the government.

Srinivasan, also the Vice Chairman and ManagingDirector of city-based The India Cements Ltd, said amemorandum had been submitted to Prime Minister Narendra Modiurging the government to take proactive measures to break thebuilders lobby.

Briefing reporters, he said, the cement industry was a'shining example' of the Centre's 'Atma Nirbhar' campaign aseverything in industry was done in India including technologyand maybe some machines may be imported from other countriesbut everything else was run by an Indian.

India was ranked second in terms of cement capacityaccounting to 500 million after China's 2.6 billion, he said.

''The United States is a 70 million tonne industry andso India is streets ahead in cement production. Cementproduction in South India alone is three times of the UnitedStates'', he said.

Srinivasan said Andhra Pradesh, Telangana andKarnataka account for nearly one-third of India's limestonedeposit and have the potential to become a 'cement hub' forfuture development.

Despite the huge potential, he said the industry wasailing due to the poor growth of the housing sector due to the'artificially high prices of flats and houses'.

''There is a clear cartel working among builders underthe banner of CREDAI and Builders Association of India who areholding on to prices despite having a margin of more than 100per cent. Unfortunately, no concrete action has been by theadministration to rein them in and their profiteeringapproach,'' Srinivasan said in the memorandum.

Confederation of Real Estate Developers Association ofIndia and Builders' Association of India (BAI) are twoassociations that represent the real estate sector in thecountry.

Giving an example, Srinivasan said, the major cost offlat price being land, the association made a check on theguideline rate for land in high end areas of Chennai.

''It is Rs 10,000 per square foot. Given an FSI of 2/2.

4, the cost of land in a flat would be approximately Rs 4,200per square foot. Adding to it is construction costapproximately Rs 2,000-Rs 2,500 a square foot, the total costof a completed flat works out to a maximum of Rs 6,700 persquare foot. However, the selling price is ranging from Rs15,000-Rs 20,000,'' he said.

Noting that there was a huge unsold inventory in thehousing space, he alleged that the builders' lobby was notallowing the prices to slide.

''Only if builders had cut the price and sold theinventory, we would have seen a total revival of realtydemand. Builders have just not taken advantage of the PrimeMinister's affordable housing scheme. Thus also denyingbenefit to the public at large,'' he said.

Srinivasan representing the traders' body urged theCentre to take proactive measures to break the builders'lobby.

''Ask each builder to come clean on costing and askthem to reduce the price at least by 50 per cent. CREDAI andBuilders Association of India have a lot of explanation to doon behalf of their members,'' he said.PTI VIJ SSPTI PTI