Mr Kamal Nath told reporters here that the reason for the high cement prices was the supply-demand mismatch.

“The government is monitoring cement prices. It is high due to a supply-demand mismatch,” Mr Kamal Nath said.

The union commerce minister made these remarks on the sidelines of the Pravasi Bharatiya Divas conference. He said the government understood the need of businesses to earn profits but would not tolerate profiteering.

“We are reviewing cement prices from time to time. While cement companies can make profits, profiteering cannot be allowed,’’ he observed.

Capacity building

His statement come sdays after the Tamil Nadu government threatened to nationalise cement companies if private producers failed to check the prices of the construction material. “The long term answer lies in capacity building. So, with new capacities coming in, I think there will be softening in the area,’’ Mr Kamal Nath said.

“There is a huge increase in construction and this has led to the gap. We need to looking at greater imports too,’’ thecommerce minister added. Cement prices are ruling in the range of Rs 240 per 50 kg bag now, but cost less than Rs 200 one and a half years ago.

This is not the first time that the government has issued a stern warning to cement manufacturers asking them to desist against cartelisation.