FOCUS
On paper, much hyped economic stability, higher foreign currency reserves, shirking budget deficit, muted inflation and others may appear to be in place. Reality is almost half of Pakistan 180 million population is hungry despite the windfall from lower oil and commodity prices.
The governments’, previous or present, smoke-screen of empty rhetorical and hyperbole of making big economic gains continue unabated. But the only thing the citizen of this country is facing an unexpected economic stagnation characterized by high food inflation even as deflation hovers on the world horizon.
Annual consumer prices inflation are rising due to food inflation. Prices of many foodstuffs increased manifold and are set to surge more in coming weeks on thin supplies after heavy monsoon rains hit various part of the country.
The government data showed annual consumer price inflation rate rose faster than expected in July, driven up by higher food prices. The CPI inflation rose to 4.1 percent last month. On month-on-month basis, the CPI inflation increased 1.3 percent in July.
In July, the wholesale price index (WPI)-based inflation increased 2.34 percent while sensitive price index increased 1.32 percent.
Analysts view poor crop weather across the country will keep food prices high. Agricultural supply shocks should keep prices under pressure. Prices of several vegetables sharply increased in July, impacting the monthly inflation numbers. Prices of tomatoes, fresh vegetables and potatoes increased 92.22 percent, 28.59 percent and 17.45 percent in July over June. Other items, which witnessed month-on-month increase, included gram whole (9.13pc), eggs (8.89pc), Besan (5.87pc), pulse gram (5.63pc), sugar (3.6pc), gur (2.5pc), onion (1.57pc), rice (1.22pc), betel leaves and nuts (1.16pc) and cigarettes (1.12pc).
The government data showed that prices of tomatoes increased 58.41 percent in July over the same month a year ago, followed by gram whole (49.77pc), pulse mash (47.13pc), pulse gram (45.81pc), Besan (42.19pc), fresh vegetables (36.84pc), potatoes (32.11pc), cigarettes (17.75pc), betel leaves and nuts (16.12pc), pulse masoor (9.38pc), tea (8.59pc) and readymade food (5.88pc).
Food price inflation, which holds the one-third weight in the CPI basket, rose 3.91 percent in July over the same month a year ago and 2.68 percent over the preceding month.
Noticeably, price inflation for the perishable food items surge 14 percent plus both month-on-month and year-on-year.
There is another twist to current price hike issue. Retailers in most part of the country challenge the government writ by overcharging consumers.
A few consumers actually go through the price lists published on a daily, weekly and monthly basis by the commissioner’s office who also happens to be the controller general of price. The only time one ever gets to see these lists or pay attention at is during the month of Ramadan.
Price lists are prepared by price control committees, who after careful deliberations decide the rate for whole sale as well as the retail market. These lists are then sent to all shops across the cities and are sold at Rs.15 to 25 by the local administration. It is mandatory by law to follow the rates and also to exhibit such lists by a shopkeeper. However, the shops only follow the second part i.e. to have the lists hung somewhere not to be seen, followed or even implemented.
So who is challenging the writ of the administration, the administration itself or the shopkeepers? A careful study of the price control mechanism reveals that setting the prices is considered to be a routine and not more. Everyone is aware of the fact that these lists are not to be followed.
A fruit vendor digs down his thela to find out where he kept the price list. He laughs it out saying “don’t know where they get these rates from.” Enquiring from grocery stores, meat shops, vegetable vendors, all have the lists with them but pay no heed to what is printed. They all know that in case if there are any raids in the market which they usually have prior information about, all they will have to pay would either be a fine of Rs5,000 or less in the case of paying underhand. Even if they are taken by the raiding officer and put behind the bars, the way out is well known to everyone.
Meetings for deliberations are held every fifteen days at the commissioner’s office and are attended by stakeholders who complain that their point of view is never taken into account.
Anis Majid, Chairman Wholesaler and Grocers Association in Karachi says factors including import, yield, production, consumption needs to be taken into account in order to set a price for any item in the food basket.
“Lack of information by the decision makers on these factors is the main hurdle in price setting. As a result the huge price difference prevails on ground,” Majid said
Take the example of mutton prices in Karachi. As per the administration’s list it is set at Rs.550/kg. However the actual price in all localities of the city is between Rs800 to Rs850. Similarly, poultry, vegetables, fruits and pulses are sold at 20 to 40 percent increased rates.
Consumers are represented through their rights associations in the price fixing meetings at the commissioner office. But are these associations successful enough to protect the rights of consumers, or push the administration to implement its decisions.
Kokab Iqbal, chairman Consumer Rights Association Karachi says there are no consumer courts in Sindh, nor any food authority.
“The stake holders are signatory to the price lists by force as no one can say no to the administration,” Iqbal says.
On the other hand big super market chains and meat shops seem to have their own price mechanism. Neither is any list of the administration ever displayed nor is it followed. Even the administration shy’s to take action against the big chains.
Consumer on the other hand continues to suffer. It is unfortunate that consumers are charged extra Rs5 on bottled water that has price printed on it. This is because, bottle is refrigerated by the shop and hence the price hike.
The administration seems to fulfill their responsibility by only asking consumers to register their complaints, although they are fully aware of the fate of their published rates.
Consumer Protection Act exists throughout Pakistan, but what is the use of this law when there is no will. Had the raids by officers with powers of first class magistrate caused any deterrence in profiteering, the situation would have been somewhat different. So it’s neither the law, nor the consumer that can bring a difference. It has to be the administration’s will in implementing its own decision! Sadly, there seems no interest at all!
The writer is a broadcast journalist
