The Budget move to reshuffle excise duty on cement may push up retail prices by Rs 10-12 a 50 bag and add to the cost of construction. The Government's decision has come at a time when the cement industry has been finding it difficult to overcome the falling demand and rising input cost. Caught between falling demand and rising input cost, the cement industry has been looking up to the Government for some relief. For instance, fuel cost has risen by about 30 per cent, power tariff by 12-15 per cent and freight cost by 10-12 per cent.
The industry expects the cut in import duty on gypsum will not be of much help as they source it domestically; while there will be a marginal relief from the reduction in petcoke import duty. Further, on the raw material cost there has been an unexpected levy of one per cent excise duty on fly ash, coal and lignite.