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The government must adopt the integrated policy on prices of essential items

Sep 25 - Oct 01, 2000

Anger is brewing up slowly amongst the poor and lower middle classes of population against the present government policies allowing frequent increases in the tariff of utilities like electricity, gas, petrol and telephone. Besides General Sales Tax, the increased cost of utilities has led to increase in the prices of large number of essential commodities of daily use making life of the common men more miserable during the 11th months of Gen. Musharraf government.

These classes of people who were in the forefront to welcome the Military government from whom expected some relief for those who were finding difficult to survive in their honest income now stand totally disillusioned. Instead of relief they now feel that perhaps no government in the past has hit them so hard in such short period as the present government. It appears that the terror has been used more ruthlessly in case of voiceless poor and have-nots rather than fabulously rich bank looters, tax evaders, smugglers and black money holders. The government, after initial expression of venom and rhetoric against these criminals, have decided to be soft on them for considerations of so-called economic revival. But nobody thought about the economic plight of the low income group while twice allowing the increase in electricity, gas and petroleum prices in a short period of 11 months. Local call rates and line rents of telephone have been increased twice which hit the common man but the charges for international calls which concerned the moneyed class have been reduced.

Even Nawaz Sharif government was scared of public reaction and hesitated to allow increase in prices of petrol and gas, levy of GST on electricity bills, increase in local call charges and line rent which directly hit poor and lower middle class. All these unpopular decisions have been taken by the present government. As against this government has found many reasons to be soft on bank defaulters and holders of tax-evaded black money in billions. Government whitened black money to the tune of over 100 billion against a payment of just 10 per cent while honest taxpayer have been paying upto 25 per cent of his income as taxes. Bank defaulters are being treated softly because of the consideration of revival of economy. Wealth tax has been abolished altogether to favour the moneyed class. As against this rates of profit on small savings have been reduced by over 25 per cent (from 17/18 to 12/13 per cent) during the last six months. As a result hundred of thousand of retired and old people and widows who were living on the profit of their life long savings have been subjected to untold misery as their monthly income has fallen by about 25 per cent while the cost of living is constantly on the rise, Adding salt to their wounds these people are told that it was necessary to reduce the rate of profit on their savings as the government was keen to advance loans to industrialists at reduced rate of interest to promote its economic revival programme which is nowhere insight.

The poor and the salaried class are getting buried under the heap of rising cost of utilities, and direct and indirect taxes, which have left substantially less to pay for eatables, education, healthcare, clothing, etc. Amid rising cost of living and increasing unemployment, those who were unable to bear the burden, either committed suicide or were being sucked into criminal activities. Many of the low-income families have withdrawn their children from educational institutions.

According to the latest survey of various markets reveal that prices of large number of essential food items have shown sharp rise in the past few months. A random market survey from Sep 1 to 15 show price surge in sugar to Rs.27 per kg from Rs.25 per kg due to falling rupee value against dollar in the inter-bank market and rising global prices. Its wholesale price is now tagged at Rs.2,550 per 100kg bag.

Shortfall in onion crop in Balochistan and N.W.F.P. can be blamed in price flare-up to Rs. 18 to 20 per kg from Rs.6-7 per kg. while in Subzi Mandi its wholesale price ranges between Rs.15-16 per kg compared to Rs.5 per kg few months back. Wholesalers in Subzi Mandi said that onion is also being exported to UAE, Singapore and Colombo and this is also a reason for increase in its prices.

Consumers have now started sipping costlier tea as almost all the leading tea packers have jacked up prices of their various brands on account of spurting global prices coupled with rupee depreciation against dollar in the inter bank market.

Egg prices rose to Rs.24-25 per dozen from Rs.20 per dozen, while prices of broiler live bird and poultry meat also soared to Rs.55 per kg from Rs.50 per kg and to Rs.105 per kg from Rs.95 per kg respectively. A poultry dealer attributed the price hike to shortage of birds at the poultry farms.

Various varieties of wheat flour like fine atta and atta No.2 posted a rise to Rs.12 per kg from Rs11 per kg from Rs.9.50-Rs.10 per kg, respectively. The spurt started with the increase in the prices of wheat and wheat flour, followed by sugar, tea, pulses, vegetables etc. The count, according to latest reports, goes up to 60, mainly edible. The causes of these increases are many and varied. The increase in the support price of wheat and additional cost of transportation are stated to be main reasons.

The government seems to be indifferent to the whole situation. It does not appear to be doing anything to bring about a halt to the continuing rise in prices. The prices of tea and pulses are said to have risen as a result of an increase in the prices of these in the international market and also because of the creeping depreciation of the value of the rupee. The increase in prices of vegetables are said to be due to short production resulting from drought and an increase in transportation costs resulting from a rise in diesel prices. The general spurt in the prices of food items is bound to have an adverse effect on the government's efforts to alleviate poverty. The erosion of the purchasing power of the common man, who spends the major portion of his meagre income on food, will squeeze and impoverish him still further.

Increases in the prices of petroleum and its products and utility charges along with the imposition of heavy sales tax on goods and services have further added to the burden of lower and middle classes. In order to face up to the challenge of a combination of factors, both national and international, contributing to the unprecedented hike in the prices of essential items of daily use, the government must adopt an integrated policy on prices and this policy should be an integral part of the poverty alleviation programme.