Considering that Bengaluru’s water woes are increasing with each passing day, speculation is rife that the city authorities might ban construction activity for five years.
Clearly, housing being a key demand driver for cement producers, such a move, if implemented, won’t bode well, more so, as it comes at a time when the overall demand is subdued.
“Considering that Karnataka consumes 20 million tonnes of cement annually and Bengaluru accounts for nearly 4 million tonnes of that, some impact on demand will be there if this move is implemented," said Binod Modi, an analyst with Reliance Securities Ltd.
So, for now, analysts are hoping that the authorities in Karnataka would work some other way out to deal with the water crisis.
“It would be draconian to put a complete ban on construction. Also, such a decision, even if implemented for a small duration, could set a precedent for other regions facing similar issues," said an analyst with a domestic brokerage house.