The Consumer Price Index reveals that the inflation during the year shot up by 7.13 percent


June 14 - 20, 2004





Despite tall claims frequently made by the Federal and Provincial Governments, the cost of living is increasing sharply in Pakistan.

The Consumer Price Index reveals that the inflation during the year shot up by 7.13 percent in the previous month of May and by 4.22 percent during the entire financial year 2003-04 as against 3.9 percent of the year 2002-03.

Although the government claims that the per capital income was also increase by 12 percent to $652 GNP, $582 2002-03, but it all seems as the gimmickry of the figures, as the ground realities present a contradictory picture indicating that even the essential items getting out of the reach of the common man.

The decision to cut a few paisas in electricity price seems eyewash rather a mockery with the poverty-ridden people of this country. Instead of reducing the electricity charges by few paisas, the situation calls for a drastic cut in the surcharge, additional surcharge, fuel adjustment charges and a number of other charges levied on power consumption which obviously make the life miserable for a large segment of the middle class in the society.

The facts on ground ridicule the government's statistics issued by the Federal Bureau of Statistic of Pakistan.

On the Government's papers, retail prices of Atta is still between Rs. 12.00 and Rs. 13.00 per Kg while it is being sold in retail from Rs. 16.00 to Rs. 18.00 per Kg. Local price control mechanism is virtually has been scrapped by the profiteers. Prices of fresh vegetable, fresh milk and fruit sharply increased. Potatoes are being sold at the rates of Rs. 10 to Rs. 12, which were sold in retail at the rate of Rs. 6 to Rs. 8 during corresponding month of last year. Tomatoes had touched figure of Rs. 30 early this year and now is being sold at the rate of Rs 16 which was sold at Rs. 8 during corresponding month in 2003 while fresh milk's retail price as Rs. 25 have been fixed by the milkmen at their own while governmentís rate are lower. Last year fresh milk rate were Rs. 20 to Rs. 22 during corresponding month.

This is the first time in the country's history that fare of public transport that include, mini buses, buses, coaches and taxis have now virtually gone out of the hand of lower class people. In this sector too, the provincial ministries control over public transport has ended. Auto rickshaws have scrapped their outdated meters and bus, mini bus and coach operators are charging fair at their own ignoring the government's fixation. House rent in the lower class areas including slum areas which was about Rs. 500 to Rs. 600 only is now over Rs. 1,000 and 1,500. In the middle class localities house rent which was between Rs. 3,000 to 5,000 now has gone up to Rs. 10,000 whereas in upper class localities it has sharply increased from Rs. 7,000 to Rs. 15,000.

Power, Gas and Telephone tariff during last three years have virtually gone from the reach of middle and lower class people. The bills of the utilities are confusing with the different levies, including sales tax, withholding tax, energy charges, development tax etc. the reduction in the power tariff and POL prices have been joke with the poor people as only few piasas were reduced per unit.



During last three years entire system of price control from Federal to Provincial level is in mess from top to bottom. There is no any stability at any level, uncertainty on political level is not allowing these issues on priority. Especially Sindh and Balochistan Provinces are on top where law and order situation is worst.

The most unfortunate aspect of the who scenario is, that profiteers do not miss single chance to mint money from essential commodities retails and whole sale due to ineffective system of price control. In retail and wholesale markets, atta, edible oil, poultry, meat, beef, sugar, fresh milk, yogurt and other essential commodities are being sold at exorbitant rates.

Poverty rate in Pakistan, which was 17.5 % in 1997, has now surged to more than 50% and government's statistics credibility has come extremely doubtful. For the last many years economists are demanding reduction in the production cost which is only possible if utility tariff including power, gas and POL is reduced. They also said that foreign investment into the country was never a solution to reduce the cost of living as foreign investors can not generate job opportunities on large scale but they take huge profit as compare to the investment. They said foreign investment would bring negative results on long term basis.

Taxation system on lower class people is also one of the major reason for increasing living cost and increasing poverty level. Experts said that there should not be a single tax on poor at any level.

Wheat crisis is one of the most important factor which directly affected lower class people, that has caused 200% increase in bread and roti rate, only four years ago roti was sold only Rs. 1.25 now that it has gone up to the rate of Rs. 2.50 to Rs. 300.

In a small restaurant, where a poor could eat lunch or dinner within Rs. 12 only now not possible even within Rs 25.00.

Poor performance by agriculture sector during 2003-2004 will also deteriorate the situation in future, especially in wheat, sugarcane and vegetable.

Policy makers are constanly ignoring the basic rules, which are causing sharp increase of cost of living in the country. Experts and opinion leaders said that cost of living would increase more sharply if senseless privatizing trend continue. Energy sector including KESC, de-regulation of POL sector and communication sector would further increase miseries of the poor people.

Education and health sectors have virtually disturbed lower income people, lower class people which is the majority of the total population can not afford education cost and health facilities from the private sectors. There is 200% increase in the retail sale of the life saving drugs and health facilities at the government level are very low as compare to the population.

In the lower class localities, a head of the family has to pay Rs 2,000 for education, including fees and books cost for average students from two to four. Even in the government run schools per student cost is stated to be Rs. 250 to Rs. 300 per month.