Minister of Micro, Small and Medium Enterprises (MSME) and highways Nitin Gadkari has written a letter to Prime Minister Narendra Modi after a steep hike in the prices of steel and cement.
Expressing unhappiness over the rising steel prices, the minister on Thursday said that if the concerned companies stick to their present policy of jacking up prices, infrastructure projects would become economically unviable and might force the government to change its policy.
“Steel companies have raised the rates by 55% in the last six months. I have written to the Prime Minister and have suggested that the issue should be discussed at the highest level. Some decision has to be taken. This (the price hike) is not good. (It has to be known) if the hike is commensurate with the increased cost of labour, power and raw materials. Lowering the productivity and increasing the rate is not a good strategy,” Gadkari said at an Assocham event.
The minister also took a jibe at the cement industry after attributing the same words for the cement sector as well. The minister claimed that if the prices of steel and cement keep jacking up the infrastructure development would become impossible.
“At a time when we are trying to create so much infrastructure, this kind of policy approach from their (cement and steel companies) side would not do any good for them in the long-term. This is also not good for the country. We need to create a long term-policy for the steel and cement sectors,” Gadkari said.
Cement’s industry average operating margin grew 25% Y-o-Y in FY’20 and further rose 20% Y-o-Y to over Rs 1,250/tonne in the first half of the current fiscal, ICICI Securities said in a recent report.
Steel prices are cashing in on higher demand amidst subdued production and limited imports, raking up the prices at a 12-year high.
