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The Tamil Nadu Government on Friday held a meeting with representatives of cement and steel manufacturers as the construction industry has been voicing concerns over increasing prices of materials.
State Industry Minister Thangam Thennarasu and State Minister for Micro, Small and Medium Enterprises T M Anbarasan and senior officials of the government discussed the price rise and associated issues faced by the construction industry. Challenges faced by the cement and steel manufacturers were also discussed.
“The discussion was broadly on price levels, availability of materials as there has been some concern over rising prices of construction materials. Also, how the government could ease out things a bit,” S Krishnan, Industry Secretary of Tamil Nadu told BusinessLine.
The construction industry has been raising the issue of frequent hikes in prices of cement and steel and they have been pointing out that a surge in input costs would escalate the cost of construction and thus impact pricing in the real estate sector.
Cost of operations up
Meanwhile, cement and steel manufacturers say that their cost of operations has also gone up on the back of a spike in prices of some input materials. “There is a misconception propagated by some quarters that cement prices have risen abnormally and thus affecting the common man. Nothing can be farther from the truth. The fact is that the average cement price for the current financial year is lower than that of last financial year,” said a statement by South Indian Cement Manufacturers’ Association.
“The main three input costs to produce cement are fuel, power and transport. TN being totally deprived of domestic coal (from Singreni or Western Coalfields) is dependent on imported coal for both fuel and power. Ironically the cost of imported coal has gone up by 4-5 times in the last few months alone. Also, the ongoing war has worsened the coal availability situation. New coal consignments are not only costlier but also hard to get. The total cost increase is upwards of ₹80 per cement bag,” it said.
Given the crisis, the government should find ways to help the industry. The public at large needs to understand that the crisis is far from over. Ongoing war is not helping the cause either, it added.
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