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India orders probe into cement price hike

The Indian government has launched an investigation into a recent price hike by several cement manufacturers, an official said on Friday.

"They (manufacturers) have jacked up prices at a time when there is a supply glut and the building and construction industry is in recession, so our department has ordered a cost audit investigation into the working of integrated players," a spokesman for the Department of Company Affairs said.

Leading cement manufacturers raised cement prices by Rs 10-15 per 50-kg bag in the Bombay market earlier this week. Retail cement prices have now risen to Rs 160-170 per bag from October's Rs 140.

"This (enquiry) will also ensure that those who have not hiked their prices will be deterred from doing so," the spokesman said.

"The director general (investigation and regulation) of the MRTPC will also launch a separate investigation into the matter," he said.

The Monopolies and Restrictive Trade Practices Commission is a quasi-judicial body functioning under the Department of Company Affairs. It monitors any concentration of economic power which may be against public interest.

The director general of the MRTPC was not available for comment.

Earlier this month, key cement makers had also decided to shut their plants for longer each year to cut production in an effort to improve prices.

India is one of the world's largest cement producers but is currently experiencing a slowdown in cement consumption growth.

Analysts said despatches are seen growing by around 7 per cent in 2000-01 (April-March), compared to 15 per cent in the year to March 2000.

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