CEMENT companies agreed on Wednesday to reduce prices by Rs 3-7.5 per 50 kg bag with immediate effect in most states. The reduction will be on the price prevailing on April 1, 2008. The move comes close on the heels of price cuts announced by the steel industry. The government, on its part, has promised to look at the issue of abatement of excise duty on cement. Following a meeting with cement manufacturers, commerce & industry minister Kamal Nath said the price reduction would be applicable on all states including Uttar Pradesh, Madhya Pradesh and Rajasthan, where cement is sold at market rates across the board. However, states like Tamil Nadu and Andhra Pradesh, where companies sell cement to economically weaker sections at a concessional rate of Rs 15 to Rs 20 per bag, will not have to execute price cuts, the minister said. Sources said that the companies operating in Tamil Nadu and Andhra Pradesh had pleaded that they were cross-subsidising the poor and they should be allowed to maintain their prices. However, sources added that companies sell a very small amount on concessional rates. The decision to reduce cement prices will help in putting downward pressure on inflation which shot up to a three year high of 7.61% last Friday. According to Cement Manufacturers' Association president H M Bangur, cement companies will hold the price line for at least three months. Mr Nath said the government will also look at various issues to help the industry and abatement of excise duty was one of them.