Minister finds PBS data on prices hard to digest

ISLAMABAD: In the beginning of this month, the Pakistan Bureau of Statistics (PBS) gave a presentation to the federal cabinet wherein it said the poor section of the society hasn’t been much affected by the price hike. The news was much to the relief of the cabinet but a few ministers couldn’t digest it.

Defence Minister Pervaiz Khattak was the most vocal among them as he expressed reservations about the authenticity of the PBS data and was much critical about the inflated gas and electricity bills forcing public to lodge protests. While a committee has already been set up to look into the disproportionate increase in utility bills, the cabinet was informed, the PBS was asked to brief the skeptical ministers on the mechanism it follows in data collection.

The News spoke to the PBS officials to inquire whether and how the poor have largely gone unhurt by inflation. For the backgrounder, the cabinet is briefed each month on price hike. The briefing done in February 7th cabinet meeting was under question. It was about the previous month.

Although, the prices of vegetables, etc, have shown decrease, according to the PBS data, the prices of meat items, utilities like electricity, gas, health, housing and transportation have shot up. Compared with the January 2018, decrease in prices of following main items was noted in January this year: chilli green (36.25 percent), gram hole (15.42 percent), garlic (2.91 percent), onion (51.42 percent), chicken (18.85 percent), potatoes (27.44 percent), pulse mash (3.57 percent), pulse masoor (0.25 percent), turnip (24.69 percent) and tomatoes (11.19 percent).

In comparison to the subsequent months (of January 2018 and January 2019), prices of these items have sky-rocketed: bus fare (50.60 percent), gas (85.31 percent), electricity (8.40 percent), beef (14.26 percent), mutton (12.40 percent), tea (17.26 percent), blood test (11.49 percent), cement (14.06 percent), LPG (14.68 percent) and others.

The consumers, the PBS told The News, are divided into seven incomes groups (Quintiles): Quintile 1 caters to households with monthly income up to Rs17,000, Quintile 2 earns up to of Rs26,000, Quintile 3 is of Rs39,000, Quintile 4 is of Rs77,000 and Quintile 5 caters to the population group with income above Rs77,000.

The inflation rate came under question in the cabinet was related to Quintile 1. If PBS is to be believed, the consumption pattern of all the income groups is examined on the basis of their family budget and spending patterns. By that measure, the PBS says, the household earning up to Rs17,000 consume vegetables which prices have lowered including that of chicken. As for as electricity and gas bills are concerned, they again have not been affected due to low slabs. Those hit by inflated bills are the ones who consumed units falling in higher slabs.

Regarding the methodology used for Consumer Price Index (CPI) and Sensitive Price Index (SPI), the PBS claims it is not only in line with international standards but also approved by global rating agencies. Renowned economist, Dr Hafeez Pasha, was however critical of the picture portrayed. He said the inflation is recoded through SPI which deals with 53 food and non-food items as inflation in non-food items has badly hit the public at large. “Inflation has increased four percent in one month alone,” he told The News.

PBS admits the increase in inflation but, it insists, not as much as has been claimed by Dr Pasha. Also the fact remains, PBS adds, SPI is monitored by the Ministry of Finance and it is on the weekly basis where cabinet asked for CPI report which data is collected on the monthly basis.

For CPI, data is collected from 40 cities. It includes 487 food items and as many as 148,048 price quotations are collected to examine the variation in different cities and markets. For SPI, as many as 53 markets are examined in 17 cities to determine the prices of 53 food and non-food items. Around 11,236 price quotations are used for the SPI analysis. Other than food items, utility bills, clothing, health, fuel items etc are taken into account in SPI.

It may be a surprising fact but PBS claims that food inflation is much lower (1.4 percent) in the first six months of the present government when compared with that period of PPP in 2008 (9.8 percent) and PML-N in 2013 (5.8 percent).