CREDAI seeks PM intervention to check cartelization by cement, steel manufacturers.

Real estate developers body CREDAI has urged the government to check cartelization by cement and steel manufacturers and to intervene in regulating the prices of raw materials.

The realtors' apex body has made representations to Prime Minister Narendra Modi and all ministries concerned seeking their immediate intervention amid the ongoing coronavirus pandemic which has adversely impacted the already sluggish Indian real estate sector.

"With a continuous and sudden upsurge due to cartelization in the prices of steel, cement and other raw materials, real estate developers are experiencing an inevitable increase in construction cost and are faced with situation that will create a delay in delivery, stalling of projects in some cases, thereby impacting the homebuyers at large. Builders are facing an uphill task of further convincing the customers of this additional burden," CREDAI said.

The representation by CREDAI comes at a time when Union minister for Road Transport and Highways Nitin Gadkari cautioned steel and cement manufacturers for the irrational upsurge in prices.

"The real estate sector has been working on wafer thin margins and is battling unsold inventory on one hand and unfinished projects due to lack of funds on the other. With a stagnant demand, developers have not increased the prices and are selling projects at affordable rates. There is an urgent need to control the spiraling cement, steel and other raw material prices and I urge the government to take necessary steps at the earliest" CREDAI Chairman Jaxay Shah said.

Indian real estate sector plays an important role in strengthening the economy as it not only employs more than 40 million workers and supports more than 250 ancillary industries.

According to CREDAI, cement and steel prices have increased by more than 23 per cent and 45 per cent, respectively since the beginning of this year. While the prices of 50 kg cement bag increased from Rs 349 per bag in January to Rs 430 in December, the rate of steel per tonne rose from Rs 40000 to Rs 58000.

"Like all sectors the real estate sector too has come out of near zero business in the first two quarters and was hopeful of revival during the festive season. High raw material costs make projects financially unviable and are causing distress amongst developers. We request the Government to do the necessary and arrest the price hike of cement and steel, as this will have a cascading effect on the homebuyers as well," CREDAI President Satish Magar said

Hits: 258