Builders' Association seek independent regulator for cement industry

Given the Competition Commission of India’s (CCI) impose of hefty penalty of Rs 6,300 crore on 11 leading cement manufacturing companies for violating provisions of the Competition Act, 2002 and indulging in anti-competitive practices like price cartelization, the Builders' Association of India (BAI) has sought for an independent regulator for the industry on the lines of insurance regulator - Insurance Regulatory and Development Authority (IRDA).

BAI’s trustee D L Desai suggested that the regulator should be given quasi-judicial authority. He also opined that CCI’s move, which slapped a fine on cement manufacturing leads against price cartelisation was remarkable, but the amount is very low compared to the profits earned by the industry. The cement industry has an installed capacity of 320 million tonnes as against the present demand of 250 MT. He added that CCI's penalty on them was only 0.5 times their profits in 2009-10 and 2010-11.

He also pointed out that Parliamentary Standing Committee, headed by Shantha Kumar has also recommended setting up a regulator in order to control profit-driven price escalation in the cement sector. All free markets need a regulator not only to regulate the sector but to expedite grievances of stakeholders, he added.