ISLAMABAD: The prices, especially those of essential items have been increased by 100 per cent on the very first day of holy month of Ramzan and will continue to rise due to absence of any effective price control mechanism and lack of any political will. Dr. Murtaza Mughal, President, Pakistan Economy Watch on Wednesday said that despite massive outcry, the volatility in prices has not been controlled nor have the other factors responsible for it been addressed.
The recent hike is artificial and has nothing to do with demand and supply gap. There is rampant market abuse and prices are artificially manipulated. “Immediate governmental intervention is required to stabilize prices of essential items, the laws are simply not working,” said Dr. Murtaza Mughal. In this scenario Utility Stores Corporation (USC) can play an important role. Website of the Corp shows 4700 stores in Pakistan while officials claim that they have 5300 stores which would be expanded to 6000 shortly.
Presently the corporation has a turnover of 4 billion rupees which is expected to multiply to eight billion during this holy month. The number of stores making over a million in a calendar month is negligible and there is an urgent need to push the number of such stores to 50,000 with focus on rural areas.
Coverage of the USC is not sufficient to benefit the majority of the vulnerable poor. A separate chain for poorest can also be launched. There is a growing consensus among officials that the government will not be in a position to stabilize prices and curb profiteering and hoarding unless it allows the Utility Stores Corp. to expand.
The market is ruled by wholesalers, stockiest and producers. USC would not be able to achieve its objective until it enters into the business of wholesale and bulk distribution. It should be in a position to control 30 per cent of the total market share and buy items directly from producers.
Commenting on recently announced Ramzan Relief Package, Dr. Murtaza Mughal said that government gave benefit of Rs.1.75 billion from one hand and snatched much more from others by increasing power tariff by 31 percent. This western policy will not work here, he said.
Government should have realized that presently 75 per cent masses are spending over 70 per cent of their total income on food. Tendency of dropping one meal, eating roti with tea/chillies and having single plates of food in hotels is touching new heights in Pakistan which will not only hurt agricultural and industrial production. The poor will have to bear huge medical bills.
Dr. Murtaza Mughal asked where from the poorest would manage finances for health, education, utility bills, clothing etc. He said that political parties are at the daggers drawn due to their ‘principles’ but bows down to IMF and World Bank which is amazing. He said that a party of the ruling coalition has abandoned government due to lip service and false promises lest masses also dump government.