Will builders pass on reduction  in steel prices to buyers?

Union Minister of State for Housing and Urban Development Kausal Kishore told the Rajya Sabha recently that the Centre took remedial measures to reduce prices of building material. In 2021-22 and 2022-23 budgets, customs duty on non-alloy, alloy, and stainless steel has been slashed by 7.5 per cent, he said. However, the export duty on the iron ore and iron ore pellets has been increased by 50 per cent and 45 percent respectively. Moreover, the export duty on pig iron and other steel products has been increased by 15 percent.

Similarly, TMT bars with thickness less than 8 mm have been removed from quality control order as they are not used in significant construction activity. Further, the GST on the affordable housing projects under construction has been slashed to one per cent from eight per cent, while the GST on other projects has been reduced to five per cent from 12 per cent. In this backdrop, the steel prices have come down and also the GST, leading to reducing the cost of construction. The people are discussing hotly whether it would lead to reduction in the prices of flats.

Recently, the prices of steel, cement and other construction material have gone up worldwide. The builders are agog over the increasing cost of construction by conducting press meets and giving vent to their difficulties. They said that they would be at a loss if the government did not take measures to control the prices of the building materials. It is not viable for them to continue in business if the cost of construction is not increased by Rs 400 to Rs 500. Several builders have increased the prices. However, it could not be ascertained immediately whether the builders will reduce the prices of flats and other properties as the measures initiated by the Center slashed the steel prices.