Under pressure from the government, cement companies on Monday decided to offer five per cent discount on ruling prices to Central government departments. Central government purchases account for 10 per cent of the total cement output. The companies also agreed to maintain the current price level and not increase cement prices in the near future.

The decision was taken at a meeting between commerce and industry minister Kamal Nath and major cement companies. Coming out from the meeting, Mr Kamal Nath said cement companies had assured the government they would maintain a check on their dealer network to prevent undue profiteering, which often resulted in higher prices.

The companies have also put forward a plan to increase production by 30-35Mt (greenfield capacities) over 4-5 years to increase supplies in the market and bring prices down, the minister said.

Mr Kamal Nath had asked companies to put forth a plan by Monday to rein in prices that had jumped over 50 per cent in the last six months. Cement is quoting at Rs 210 per 50-kg bag at present compared to Rs 130 per bag in October 2005.