Close on the heels of a government minister, real estate developers in India have also claimed that domestic steel and cement producers are cartelizing to push up prices, the Confederation of Real Estate Developers’ Associations of India (Credai) said on Monday, December 21.
Credai has written to the Indian prime minister, Narendra Modi, seeking immediate government intervention in reining in steel and cement producers from forming cartels and increasing prices, which is increasing project costs and impacting the affordability of housing for common consumers.
“With a continuous and sudden upsurge due to cartelisation in the prices of steel and cement, real estate developers are experiencing an inevitable increase in construction costs and are faced with a situation that will create a delay in delivery, stalling projects in some cases, thereby impacting homebuyers at large. Builders are facing an uphill task of further convincing the customers of this additional burden,” Credai said in its communication to the prime minister.
“Cement prices have increased by more than 23 percent and steel prices by over 45 percent since the beginning of this year. In January 2020, the cement price (a 50 kg bag) was around INR 349 and has increased to INR 420-430 per bag in December. At the beginning of this year, the per tonne rate of steel was INR 40,000 and has rocketed to INR 58,000 in December 2020,” Credai said in its communication.
Significantly, it may be noted that earlier this month Nitin Gadkari, minister of highways in the present cabinet, also sought immediate government intervention to check rising prices of steel and cement, claiming that cement and steel producers were cartelizing to ‘unreasonably increase prices.”