Oligopoly is not good for customers

Within a week of the Tamil Nadu government's threat of taking over cement factories in the state if the companies did not cut prices, cement manufacturers have offered to sell 20 lakh bags of blended cement every month in all districts of Tamil Nadu at a subsidised price of Rs 200 per 50 kg bag.Top officials of cement companies like India Cements, Madras Cements, Grasim Industries, Associated Cement Companies, Ultratech Cement, Dalmia Cement and Chettinad Cement met Tamil Nadu Chief Minister M Karunanidhi today, and submitted their joint acceptance letter stating their intention to make available cement at reduced prices.--- BS


Oligopolist always have the tendency to form a cartel and control the market. Whent it comes to cement, it seems as if this is the industry that have been perfectly matched for this tactics.

TN government seems to go against for the prices fixed by the companies in this industry. Most of the pundits are seeing this as a war between Mr.CM and maran family whoz said to have controlling stake in India Cements through various spiders.

I don't know about their feud, but this definitely seems to be a great news for construction industry and ofcourse home buyers. They might possibly get atleast 2%-5% drop in prices. How? If this is a first step, then various raw materials that are related to construction and other related industry would be regulated in a fair manner. Most of the people won't buy my argument. Cement industry always had the tendency to increase the prices despite fair price in raw material for cement. Most of the top biz man went against the controlling that has been done by our commerce minister. Infact Television channels argued against minister and lobbied for cement sector.

If cement companies play a fair game, then there is no need for any intervention. If they tried to capitalize the demand and charge unfair prices, then it would certainly affect the economy. Only few section of the economy really have the buying power and could afford it. Others could only see how these guys are consuming.

"Rich become Richer, Poor become poorer". This would continue despite 9% GDP growth. There is no inclusive growth. Only few people are making money and rest are just seeing it in their Television Channels. Then there won't be fair competition. New comers can't come to industry. There won't be any innovation. There won't be job creation.

“Business is not only about money its also about economy”