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September 29, 2013

People deserve early relief from price pressures

Peshawar

September 29, 2013

Prices, once gone up, do not come down. That is the axiom. In our own case, the runaway inflation has been putting a heavy burden on the common man as prices of essential items have skyrocketed over the last five years. With minimum wage being quite modest and an average family comprising about six members, the effort to keep body and soul together is getting difficult day by day.
Growing apprehensions that inflation might climb to double digit this fiscal year comes as yet another bolt from the blue for the masses. Reeling under unrelenting price pressures, they have been subjected to additional financial burden. In the first three months of the current fiscal year, prices have been showing a heartless upward trend.
The whole year’s inflation target of around seven percent has already been breached. Some early forecasts put it at still higher number as the year rolls on. The increase in petroleum and its products has been a major factor in pushing the prices up.
The fall in the value of rupee against dollar has also contributed to rise in prices. The cost of imported goods would escalate as a result and the burden is going to be rather heavy. The increase in general sales tax has also had an impact on prices.
In addition to that the withdrawal of energy subsidies, prospects of government borrowing from the central bank and removal of certain tax exemptions are bound to put further pressure on inflation in coming months. This simply means that after braving inflation and high prices, especially of essential items, majority of the people will find no respite.
It should not come as a surprise that a very large number of people live in the shadow of poverty. Finance minister was quoted as saying recently that 60 percent of the population lives below the poverty line. The growing number of people who fall in this category is, in great measure, due to soaring inflation and price escalation. Unfortunately, there has been much talk about vulnerable

groups in the society but rhetoric and promises are no substitute for much awaited relief.
On the contrary, the economic reforms programme as agreed with multilateral aid agencies are said to be causing considerable pain to the under-privileged and fixed income groups. The latest is an arrangement with the International Monetary Fund (IMF). Economic experts are of the view that reform measures stipulated under it would also burden the common man.
The government has recently raised the minimum wage to Rs10,000 a month and also allowed an increase of ten percent in pay and pensions of its employees. Ostensibly this has been done to provide some relief but this also amounts to admitting the fact that inflation and price spiral have been eroding the incomes of the people. And yet the successive governments have followed policies that unleashed unbridled inflation.
People are usually advised to bear the pain as reform process gets underway. But experience tells that while the pain has persisted the promised economic turn-around may still be a mirage. The economy continues to suffer low growth, high inflation, price spiral, huge fiscal deficit, balance of payments gap and woeful lack of social sector amenities.
The question usually raised is whether the governments, both at the federal and the provincial level, would lay down systems fully responsive to people’s problems. Despite development funds worth billions of rupees allocated on an annual basis, the fact remains that hardship and misery at the grassroots level have continued to persist. The persisting inflationary trend and the recent escalation in prices have only been adding to the suffering of the common man.