CALCUTTA, December 25: Cement availability and population growth have outpaced the increase in per capita cement consumption in India, suggesting that the domestic market is saturated, according to AK Chatterjee, director of Associated Cement Companies.

In a paper presented at a seminar in Calcutta recently, Chatterjee pointed out that per capita consumption of cement will grow to 113 kg by 2001 against only seven kg in 1950. But this compares poorly with the world average of about 248 kg.

During this period, India's per capita GNP is estimated to grow to Rs 21,990 from Rs 260. For the study, Chatterjee considered decade-wise data from 1950 to 1990-1, while extrapolating the figures for 2001. Although per capita consumption of cement is very low in India, the "surprising factor" is the overproduction of cement. Chatterjee adds: "The growth of per capita cement consumption of urban India does not have a direct relation to the growth of cement production."

This, the article maintains, means that cement produced in India is distributed between urban and rural population in a ratio which differs from state to state due to various socio-economic factors.

"This anomaly today is causing concern to the planners of the cement industry in India and, although further growth is certain in this developing economy, there is discomfort as to how this growth will be achieved," Chatterjee notes in his paper.

Quoting from a study which categorises economies on the basis of per capita income, Chatterjee observes that the per capita consumption of cement "shows a jump in the lower economy range with the economic development, the economic growth in the higher echelons may not be directly reflected in the increase in the per capita consumption of cement."

According to the study, per capita consumption of cement is less than 100kg in the low income economies (having per capita GNP in the range of $100-600), while high income economies (having per capita GNP in excess of $10000) have per capita cement consumption in the range of 300-900 kg.

The current per capita GNP of India is $370. "Notwithstanding its size and capacity of cement production the economic performance of India would have to improve for any substantial jump in the per capita cement consumption," he remarks.

Data compiled for the period from 1980-81 to 1995-96 show that cement availability increased by 202 per cent from 22.5 million tonnes to 68 million tonnes while per capita consumption of cement increased by 114 per cent from 34 kg to 73 kg.

If one were to exclude the segment of Indian population living below the poverty line and with very low earning capacity, Chatterjee points out that the per capita consumption of cement would appear to be only 89.5 kg in 1995-96.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.