Flour crisis, rising commodity prices: Absence of magistracy system cited as major factor

Absence of a magistracy system and the failure of the Finance Ministry to engage with the provinces through convening Price Monitoring Committee (PMC) meetings regularly are being cited as major factors for the flour crisis and increase in price of essential commodities.

Prime Minister Imran Khan is scheduled to hold a Cabinet meeting on Tuesday (Feb 11) to deliberate on the causes behind the recent escalation in food prices, with food inflation estimated at over 24 percent by the Pakistan Bureau of Statistics, and to take mitigating measures on an emergent basis.

The Economic Coordination Committee (ECC) of the Cabinet, currently chaired by the Advisor to the Prime Minister on Finance Hafeez Sheikh, and the price monitoring committee (chaired by the finance minister during previous administrations and attended by all the provinces), review the price of essentials on a regular basis enabling them to react promptly if there is a shortage of any commodity.

While the ECC has been meeting regularly yet it has not focused on price of essentials and its decisions with respect to import/export of the staple wheat have been based on poor data, market sources claimed. A maximum of two to three price monitoring committee meetings have been held during the tenure of the present government, and there is little interaction with provinces on the matter, even with Punjab and Khyber Pakhtunkhwa where PTI forms the government. In marked contrast during the tenure of the PML-N government there were regular meetings of the price monitoring committees.

Sources added that engagement with the provinces is very critical to determine the commodity situation that would enable the government to take timely decisions in terms of what and when to import adding that administrative failures of the federal government did contribute to the current shortages and price rise.

An official of Finance Ministry maintained that absence of magistracy system is a factor in the rise in prices, adding that subsequent to the 18th Constructional Amendment, the federal government has no authority over prices as the authority has been devolved to the provinces.

He added that under the magistracy system the Deputy Commissioner (EC) had been monitoring prices and had the authority to impose a fine and award punishment on the spot.

The official said that increase in sugar price was without any justification as sugar production was higher by 3.6 percent as compared to previous year and there was no shortage of sugarcane in the country. He added that one and half months before sugar mills were not ready to start crushing on the basis that they had sufficient sugar stocks.