What kind of measures should be taken by the government to control unrealistic increase in the prices of all essential items ahead of the forthcoming budget (2007-08)? It's a big challenge for the government.
Since the announcement of the current year's budget, the prices of most of the commodities and all essentials of life have shown an increase from 2-10 percent during the 11 months of the current fiscal year (2006-07). A fresh example is an abrupt rise in the prices of rice and edible oils.
As a whole, it came under observation that during full year, prices go up with gradual pace, apparently for the several reasons, but nobody knows what is the reality behind the rise. In the budget, the government draws rosy picture and introduces several incentives and many welfare programmes, but instead they face opposite circumstances.
Under the circumstances when the prices of rice are going sky-high in the local markets, the government must take notice of smuggling of the commodity to save exports and also to stabilise prices in the local markets, exporters and wholesale dealers said on Friday.
They were of the opinion that soaring prices of rice were causing extraordinary burden on the local consumers, especially the middle class, as the rates of other essential items have already gone up despite the government's long-drawn slogans of meeting the basic needs of the nation.
It came under observation that not only rice or wheat rates were soaring, the prices of most of the commodities and several essentials of life have gone up sharply, ahead of the Budget for 2007-08.
What will be very unusual or surprising in the new budget for the public, when prices have already gone up sharply? The general public is not so much interested in the new budget; it is enough for them that the budget should be pro-poor and people-friendly, as the government is beating the drums that it is making all-out efforts in this regard. There are some factors behind the rise in the prices of rice, such as short crop in India this year and also in some major rice producing countries.
This factor has caused unrealistic increase in rice prices but, on the other hand, there is rising expectation that the country would be able to achieve the export target of 1.5 billion dollars mark for the current season.
When the country is going to achieve the exports target and it has also to meet the domestic demand, how can it bear the burden of smuggling. According to a news, nearly 100,000 tons rice is smuggled every month. This negative trend must be stopped because it has pushed up the pries locally.
Besides, the export trade is also under serious threat. The government must take action to stop smuggling. In the meantime, the Rice Exporters Association of Pakistan (REAP) has urged the government to refrain from any wrong decision of banning rice exports. This would hurt the confidence of foreign buyers.
To increase the exports, the government has again set production target of 5.7 million tons of rice, which appeared unrealistic after failing to get the 5.6 million tons target for the current year. The interesting thing to observe is, how the government will control the rice prices locally as it has banned the wheat export to halt prices of flour? dealers said.
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