The happy tidings of a relief up to 15 percent in the prices of 500 essential items of general use during the fasting month of Ramazan, as the Minister for Industries and Production, Jahangir Khan Tareen, gave at a press conference the other day, on the Prime Minister's Price Relief Package, will be received by the people with mixed feelings.
Heartening in itself though the announcement may sound, the unpromising side of the scheme is its implementation through the network of Utility Stores Corporation. Apprehensions are, of course, based on many a past failure of the entity in similar efforts.
Total Ramazan relief would amount to Rs 250 million, besides government's subsidy of Rs 100 million. The minister said that through 400 utility stores, weekly bazaars, 59 mobile stores and 107 temporary Ramazan stalls, the USC would be selling pulses, rice, Baisan, squashes/syrups, dates, pickles, milk and spices at 10 percent reduced rates and tea and vegetable ghee/oil at 5 percent reduced rates with immediate effect.
In addition, sugar and wheat flour will be sold at Rs 23.00 and Rs 11.50 per kg, respectively, as both these items are already being provided at discounted rates under the Prime Minister's directives.
Evidently, pointing to the government's concern over the price hike and shortage of essential goods afflicting the country for a long period, the minister made a pointed reference to Shaukat Aziz's directive to the provincial governments to take harsh action against hoarders and profiteers during Ramazan, while asserting that every possible measure will be adopted to keep the prices in check.
In so far as the role of USC is concerned, he said that the network would be supplemented by mobile stores in areas where its stores are not operational. More to this, he referred to a plan in the offing to establish some 600 to 800 new utility stores.
As for the USC's mode of working, Tareen said that its stores will be selling over 500 other essential items at 5 to 15 percent reduced prices, by obtaining higher discount from the wholesalers, as also by reducing its own margin. He also contended that under the relief package already announced by the government, the sale of subsidised sugar has provided a relief of Rs 255.50 million, and that since June 2005, USC has extended a relief of Rs 83.65 million to the general public through the sale of subsidised atta.
Be that as it may, the grim fact remains that for quite some time the overall efforts for consumer relief against shortages and high prices of essential commodities have yet to prove equal to the occasion. Generally speaking, the administrative side of the relief effort falls in the purview of local administration and the provincial governments.
They appear to have failed in the task, primarily because of scant attention to streamlining their system to meet the requirements of the situation and also because of the lacunae in law to deal effectively with violation of the rules.
It will also be noted that distortions developing in the marketing and supply systems with the passage of time have yet to be seriously addressed, thus leaving little scope for curbing the tendencies of hoarding and profiteering. As such, at a time when efforts are being haphazardly made to introduce a market-based economy in the country, price checks remain blocked by too many inconsistencies in the system.
Needless to point out, the situation is initially aggravated by the government's intervention in the market, as it contravenes the government's basic policy. Naturally, therefore, a state entity like the USC invariably makes confusion worse confounded.
For one thing, creation of the USC, in the turbulent 1970s, betraying a glaring lack of objectivity, had proved to be an exercise in futility.
With the concentration of a small number of utility stores, in large cities, while offering a range of consumer goods at fair prices, whatever relief emanating from it largely accrued to an insignificant section of the middle and lower middle income groups of the urban population, far away from the large bulk of the suffering millions in the countryside.
Yet successive governments, though reversing the policy of nationalisation, and dismantling many public sector institutions, let the USC remain in place, even at heavy cost to the national exchequer. However, it was in 2002 when the Ministry of Industries decided to close down 200 out of the 380 of its loss making stores, viewing the entity as having turned into a white elephant. On that occasion, the then Commerce Minister had categorically stated that indulging in any business activity did not fall in the purview of the government's functions.
Perhaps, the presence of utility stores was in evidence only during the frequent acute shortages of sugar, ghee, atta and other household items. But with the passage of time and with the opening of more and more stores in smaller towns too, started pouring in disquieting reports of corruption in the management of the huge USC set-up.
However, intrigued though the past governments remained at the wastage and losses due to structural shortcomings and mismanagement, they just overlooked the need of its dissolution. Now, certainly, is the time to give it a decent burial, for it has failed to meet the needs too frequently caused by shortages and price hikes.
Again, since the dual menace of shortages and high prices has been lately acquiring ghastly dimensions, it may be worthwhile for the government to intervene in it so as to regulate the market from within.
For, as it will be recalled, the rationing system introduced in the World War II years in the subcontinent, functioned from inside the market through appointment of authorised dealers, thereby serving its purpose far and wide, to a considerable extent. It can be put in place on a short-term basis, until such time as an elaborate marketing mechanism is evolved.