It seems that the present government, headed by Prime Minister Shaukat Aziz, is neither interested in tackling the problem of inflation nor it is taking any concrete measures to curb inflation, which is at present being observed in double digit, making figure the fixed income-earner poorer than before increasing more countrymen under the poverty line.
My above assumption is based on the following facts which are being ignored at all levels of the Ministry of Finance and State Bank of Pakistan as they are well aware of it but why could they not take a firm stand on it, is not understandable.
The first and foremost reason for the increase in inflation is the issuance of currency notes which are being issued every year in abundance since the financial year 2000/2001 till todate that is 2004/2005.
But we had never seen, in these years, any contraction in the notes issued.
It is to noted that whenever any remittance is received, either from workers abroad or loans, aids and grants if any is disbursed and received from the World Bank, ADB, IMF, any other world renowned institutions, multilateral donors and countries, the State Bank does not take a minute for the issuance of currency notes against these receipts whereas the contraction of note issue does not take place when any foreign payments are made either in the case of principal, debt servicing, dividends, air and sea freight and other invisible accounts.
As your newspaper readers are well aware that during the financial year 2004/2005 our country had witnessed a negative balance of payments, amounting to three billion dollars, equivalent to rupees 1800 billion, which had gone out of the country but no contraction of note issue took place of that amount from the State Bank of Pakistan.
In view of the above it can be assumed that the inflation rate will increase by at least two basic points or more by the end of December 2005.
If this trend of note issue continued. It is advised that the higher authorities of the Ministry of Finance and the central bank come forward and clarify the position.