The facts have to be acknowledged. The cement industry has excelled in areas which are within its control. It has made rapid strides not only in terms of capacity addition but also in producing world-class quality cement from state-of-the-art technology. The industry which is on the top in the Certified Emission Reductions Projects list registered with the Clean Development Mechanism (CDM) of the Kyoto protocol has contributed significantly to the eco-friendly use of industrial wastes and thereby reduced its carbon footprint. However, the current economic slowdown has had its impact on the growth of the industry – the growth has dipped from an average growth of around 8-9 per cent in the last couple of years to the present low of 5 per cent.
The government ambitious plans to enhance the share of manufacturing in the GDP from the present 16 per cent to 25 per cent by 2022, makes it imperative that the cement industry grows by at least 14 per cent annually. This dream figure can only be achieved if provided with the major infrastructure related requirements like adequate supply of input materials, and logistics support such as an efficient transport system, especially rail transport, the availability of sufficient supply of coal and power. This also calls for the right kind of policies by government including the rationalisation of tax structure and the creation of committed increased cement demand through focus on infrastructure spend.
It is heartening to note that the Working Group on Cement Industry for the 12th Five -Year- Plan (2012-2017), after critically examining various aspects of the industry and also of the Indian economy, had set a production target of 407 million tonnes cement by the concluding year of the 12th Plan. To achieve this target, the Group had made a number of important recommendations like providing freight subsidy to enhance the global competitiveness of Indian cement producers; increasing the cement/clinker despatches by rail from the present 20 to 50 per cent; creating a suitable rail traffic regulatory mechanism to resolve all rail matters including tariff and demurrages; providing adequate emphasis on the development of Inland Water Transport (IWT) which is a fuel- efficient, environment-friendly and cost-effective mode of transport; providing a level playing field to the domestic production vis-a-vis imports with a minimum 5 per cent duty along with the applicable CVD, and rationalising the excise duty rate from 10 per cent to 6-8 per cent. Then again, whether there is enough political will to act on these, which will in turn, enhance the efficiency of the whole system and help the consumer get better service, is a moot point. Please send in your feedback to Editor@asappmedia.com