October 16, 2008

CPI demands cancellation of leases to curb price hike

BL quoted Mr K Narayana state secretary of Communist Party of India as saying that the government can reduce prices of materials like steel, gravel and cement used for construction and infrastructure by canceling the existing leases with contractors and dealing directly with customers.

Mr Narayana said that unless the government took measures to break the grip contractors had over steel, quarry and mining sectors, it would be difficult for it to check the rise of prices. He added that “Long term contractors had total control over the steel business. The steel mills sold the material through these commission agents, who created artificial scarcity whenever there was an increase in demand.

He further added that 10 families that had LTCs in over 60 names controlled the steel business by forming into a cartel. He said that the cost of developing infrastructure like buildings, bridges and roads could be reduced by 50% to 60% by breaking this cartel.