BAI writes to PM, calls for Cement Regulatory Authority

To curb the cartelisation and undue profiteering persisting in the cement manufacturing industry, the Builders Association of India (BAI) has urged Prime Minister Narendra Modi to constitute a Cement Regulatory Authority for the sector.

In a letter written on November 5, 2020, Mu Moahan, President, BAI has stated that such a regulatory authority will prevent manufacturers from indulging in unethical trade practices, which have been causing irreparable damage to the country’s economic growth and hurting the interests of the common man and in turn, the construction industry.

The BAI has substantiated its demand with the rulings and observations of various statutory bodies, committees and submissions in supreme institutions like Parliament and its statutory committees.

“The Competition Commission of India (CCI) in a case filed by BAI, conclusively found on June 20, 2012 the existence of cartel arrangement amongst the cement manufacturers resulting the manipulation of sale price of cement. The CCI imposed a penalty of Rs 6,307.32 crore on 10 cement manufacturers and Cement Manufacturers Association (CMA). It also issued ‘cease and desist order’, against which the manufacturers moved an appeal before National Company Law Appellate Tribunal (NCLAT). The NCLAT in its order dated July 25, 2018 upheld the penalty. The cement manufacturers have now filed an appeal before the Supreme Court on October 5, 2018, where it is pending since then,” the letter has stated.

The letter has also cited an observation by Parliamentary Standing Committee of Ministry of Commerce which in its 95th report on ‘Performance of Cement Industry’ tabled on February 24, 2011 in Rajya Sabha, has recommended need of the constitution of a regulatory authority.

In another instance quoted in the letter is an inquiry by the Monopolies and Restrictive Trade Practices Commission, which directed the cement companies to ‘cease and desist’ finding them guilty of forming cartel.

The cement industry was de-controlled in 1989 and de-licensed in 1991 under the policy of economic liberalisation. Decisions of installation of new plants are taken by the industry based on market demand.

Citing the above-mentioned facts, the BAI has urged the Prime Minister to constitute Cement Regulatory Authority on the lines of the ones constituted for the telecom, real estate, and insurance sectors.

Builders’ Association of India (BAI) is the apex body of Construction Industry, founded in 1941, with more than 20,000 business entities as members through its 200 centres (branches) throughout the country.