REGISTERED No. D-(D)-73
The Gazette of India
EXTRAORDINARY
PART I—Section 1
PUBLISHED BY AUTHORITY
No. 65] NEW DELHI, WEDNESDAY, APRIL 9, 1975/CHAITRA 19, 1897
Separate paging is given to this Part in order that it may be filed as a separate compilation.
MINISTRY OF INDUSTRY AND ClVlL SUPPLIES
(Department of Industrial Development)
RESOLUTION
New Delhi, the 9th April 1975
CEMENT PRICES
No. 1-10/74-Cem.—In Resolution No. 1-10/74-Cem., dated the 1st August, 1974, the Government had summarised the main recommendations of the Tariff Commission in its report of April, 1974 on cement industry and had also announced the ex-works retention prices of cement produced by the existing units. In regard to ex-works retention prices for (a) units holding industrial licences/C.O.B. licences which were in the process of being set up and were expected to come into production shortly and (b) units which were not expected to come into production till the last couple of years of the Fifth Plan period, it was stated that the recommendations of the Commission were under examination of the Government and that decisions thereon would be announced separately. The decisions since taken by the Government are set out in the following paragraphs.
2. Keeping in view the higher capital cost of new units the Tariff Commission had recommended that the new units, which were in the process of being set up and which were expected to come into production shortly, should be granted an ex-works retention price
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296 THE GAZETTE OF INDIA EXTRAORDINARY [PART I—Sea "ifhigher than that for the existing units by Rs. 10 per tonne and that the expansions falling under this category be granted a price higher than that (or the existing units by Rs. 5 per tonne. The Government feel that it will not be desirable to make any distinction between new units Sand expansions and, therefore, have decided that the expansion as well as new units falling under this category bo granted a uniform ex-works retention price higher than that for the existing units by Rs. 10 per tonne. The Cement Control Order, 1967 is being amended accordingly,
3. On the basis of the estimate of cost of putting up new plants, the Commission had expressed the view that the ex-works retention price of Rs. 161 per tonne would be reasonable for such units, provided their capital needs were partially met by the grant of interest free loans on long term basis from the Cement Development Fund, to be created by a levy of Rs. 10 per tonne on the cement produced and a matching grant by Govern- ment. The corresponding ex-works retention price recommended for the expansions falling in this category was Rs. 149 per tonne. It was recommended that, if for any reason the Cement Development Fund w'as not created, a further element will have to be added to the price, to take care of the servicing charges on the additional investment involved in the setting up of new units.
4. On careful consideration the Government have come to the conclusion that it will not be appropriate to levy a tax/cess on production of cement, with a view to create a Fund for financing the future expansion of the industry. It will also not be possible for the Government to make a matching contribution as a grant to the proposed Fund.
5. Government find that since the inquiry undertaken by the Tariff Commission, the dapital cost of the new units has increased further. Therefore, it may not be reasonable, nor in the interest of the further growth of the industry, to fix retention prices for the new units, expected to go into production (.Hiring the last couple of years of the Fifth Plan period, at the levels recommended by the Tariff Commission, The Government have, instead agreed in principle to so fix the ex-works retention prices for such new units (with- out making a distinction whether they arc new units or expansions) as to ensure a return of 14 per cent on capital employed, subject to the stipulation that the capital cost per tonne of the new installed capacity will not exceed Rs. 650. As 'and when any such new units go into production suitable provisions will be made in the Cement Control Order, 1967.
ORDER
Ordered that a copy of the Resolution be communicated to all concerned and that it be published in the Gazette of Tndia.
D. K. SAXENA, It. Secy.
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