Cement may not get excise relief

DAVOS: The government has decided against a reduction in the excise duty on cement. This is likely to disappoint domestic cement manufacturers, who were looking forward to this sop after the government scrapped Customs duty on portland cement.

The government is likely to initiate steps against cartelisation and make inputs cheaper for cement manufacturers, government sources said. The domestic industry can expect lower excise on slag, a key raw material for portland cement. The government wants to encourage the use of portland cement instead of the normal variety, which uses high-quality limestone. Portland cement is not commonly used in India and is not available in most markets.

There is no move to slash excise duty on cement as it will not benefit the common man, the source said. Due to ���oligarchy���, cement manufacturers do not want to pass on any benefits to consumers, it was explained. Under such circumstances, a reduction in excise duty is ruled out.

Even the recent move of Customs duty reduction is unlikely to benefit consumers. India imports only about 50,000 tonnes of cement from countries such as Bangladesh and Bhutan.

To soften cement prices, the government is considering other alternatives. ���India mainly uses high-quality cement, made from limestone, which is often not needed for the purposes it is being used. It is also more expensive. So we intend to encourage use of cement made of fly-ash and slag,��� an official said.

The government is also considering proposals such as reducing excise duty on slag from the existing 8%. It has asked state electricity boards to sell fly-ash free of cost to cement manufacturers. It is also proposed that cement manufacturers may be given more coal linkages.