Cement sector seeks Rs 48,000 crore annual outlay for cheap housing

Kavita K Bhaskaran

New Delhi, Jan 4: Cement Manufacturers Association (CMA) has urged the government to earmark an outlay of Rs 48,000 crore per year for the next five years a total of Rs 2,40,000 crore for promoting low cost housing, cement concrete roads and canal lining.

In a pre-budget memorandum to finance minister Yashwant Sinha, CMA has said the government may extend funds to various agencies at international rates of interest for the next five years. “Government should possibly tap these funds from World Bank, Asian Development Bank and international markets,” CMA stated.

The association has also asked for an increase in import duty on cement to 35 per cent plus Countervailing Duty (CVD) and Special Additional Duty (SAD as against the existing 25 per cent plus CVD and SAD.

According to CMA, there is a need to boost cement demand for optimum utilisation of economic resources. “Boosting cement demand in key segments of economy like housing construction, agriculture and canal linings, concrete pavements in national and state highways both in rural areas and urban areas is essential as these segment carry maximum linkages and potential in terms of growth and employment,” according to the memorandum.

This outlay should be spent low cost housing for lower middle class and cement concrete roads for better roads to facilitate faster and smooth movement of goods to provide infrastructure support needed for economic growth.

The cement manufacturers have asked the finance minister to ask the Central Public Works Department (CPWD) to revise the code for concrete and reinforced concrete based on international prices.
It has suggested that flyash should be allowed for concrete roads and NHAI should follow the circular issued by the International Roads Corporation (IRC) on use of flyash.

Studies have shown that concrete roads could mean higher cost initially but lower maintenance and more cost effective in the long run than the bitumen roads.

CMA has urged the government to consider 50 per cent remission of excise duty paid by road building agency or defer its collection by 5 to 10 years when the savings in maintenance accruing to them in these years places them in a better financial position.

The industry has also asked for reduction in import duty on non-coking to 5 per cent. it said “to improve the productivity of the cement industry and produce a better quality cement, utilisation of low ash coal is preferred.”

CMA has asked for elimination or reduction on electricity duty on captive power by all states and removal of procedural approval for setting up of captive power plants.

It has asked the government to revoke the increase of Rs 8 in the royalty on limestone. Last year the government had increased the royalty on limestone from Rs 32 to Rs 40. The increase of Rs 8 per tonne in the mining royalty has a direct impact of Rs 12 per tonne in the input cost of cement involving an additional burden of over Rs 125 crores on the cement industry which is already passing through financial crisis.