Small business operators including shopkeepers, cloth merchants, auto workshop owners, air-conditioner mechanics, laundry operators, hotel owners and others are being forced to lay off staff owing to serious economic challenges. During an anecdotal survey carried out by Business Recorder in the main commercial hubs of the twin cities of Rawalpindi/Islamabad ninety five percent of all small and medium traders expressed their anger at the government policies which has forced them to scale down their operations with a few being compelled to shutdown altogether.
Small scale businesses including auto mechanics, laundry shops, cloth merchants, milk suppliers, retailers and wholesalers while talking to this correspondent said prices of everything over the past one year have witnessed a significant increase and after the start of the new fiscal year on 1 July consumers have reduced their shopping by almost 30-50 percent. The government decision to impose tax and raise utility prices has further worsened the situation. A tandoor operator Umair Abbasi said that tandoor owners have decided to increase the normal size of Roti price from Rs 8 per Roti to Rs 12 per Roti and normal Naan from Rs 12 per to Rs 18.
Giving the reason behind the increase in Naan and Roti price he said that there are three reasons why they were compelled to increase the price of their products: (i) the government's imposition of 17 percent General Sales Tax (GST) on wheat flour, (ii) the flour mill owners decision to raise flour price owing to an increase in gas and electricity prices which has taken wheat flour price to Rs 3,900 per 80 kg bag from Rs 3,200 per 80 kg bag and (iii) gas bill of the tandoor owners has jumped from average Rs 25,000 per month to Rs 75,000 month.
"In such situation we are left with no option other than to pass on the burden to the end consumers", Umair said.
Imran Shinwari a cloth merchant in Rawalpindi said that his sales have dropped by 60 percent as the material is too expensive and utility bills and shop rent have sky rocketed. Thus in the past daily sales were around Rs 100,000 but are now a maximum of Rs 40,000-45,000 per day which is why we were forced to scale down our operations, he added.
"One month ago I was employing 10 persons but now I am employing only seven," he clarified adding that if the government does not change its policy "I will be left with no other option but to close down business".
Zafar Malik, a wholesaler said that during the past one month as a result of significant increase in the prices of all the kitchen items the entire supply chain has been disturbed.
He also stated that the number of clients have declined leading him to reduce his own purchases from producers/suppliers of various goods.
He said that wheat-flour price has jumped to Rs 870 per 20 kg bag from Rs 750 per 20 kg bag, sugar from Rs 3,100 per 50 kg bag to Rs 3,500 per 50 kg bag, Basmati rice from Rs 11,500 per 100 kg bag to Rs 14,500 per 100 kg bag, good quality cooking oil from Rs 190 per kg to Rs 220 per kg, branded tea from Rs 780 per kg to Rs 900 per kg, Tetra pack milk from Rs 130 per litre to Rs 135 per litre, price of an entire range of spices have been raised by Rs 15 per pack from Rs 50 per pack.
"Our clients are earning the same amount but things are available at higher prices, therefore they have reduced their household expenditures as a result every person is affected," he added.
Malik said that his daily sales were around Rs one million which have dropped to Rs 50000 adding: "I have begun reducing personal expenditures and laying-off staff. Previously I had 13 staff but now employ only 8 employees, and in the past my average monthly electricity bill was in the range of Rs 20,000 to Rs 25,000 which now has touched Rs 50,000 mark."
Several medium sized traders in the twin cities complained of "big fish" buying entire containers which they are not releasing onto the market yet as they reckon they could make windfall profits once the supply of foreign goods in the market dries up.
Azhar Gondal, a milk shop owner said that prices of everything have risen dramatically - from fodder to electricity to gas and owning to the increase in input costs he has increased milk price by Rs 20 per kg - from Rs 90 per kg to Rs 110 per kg and yogurt price from Rs 110 per kg to Rs 130 per kg.
"My clients have reduced the amounts they buy and as a result my sales are down almost 30 percent. Six moths ago I was spending Rs 20,000 daily on maintaining 50 buffalos but now the cost has gone to Rs 30,000 daily, therefore, increasing the milk, yogurt, cheese and butter price was inevitable," he lamented.
During the survey this correspondent reached out to all those engaged in various segments of the economy including private school owners, students taxi drivers, barbers, tailors, restaurants owners/workers, spare part sellers, saloon operators. All of the people unanimously held government polices responsible for depriving them of their ability to make ends meet and urged the government to review its economic policies.
They said if there were no businesses how will the government collect taxes to run the state matters?
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