June 06, 2006	Tuesday	Jumadi-ul-Awwal 9, 1427

KARACHI, June 5: The government hitherto a strong preacher of free market economy decided on Monday to intervene into market affairs with administrative tools and devised a strategy to check the exploitation by the advocates of free market.

The State Minister for Finance Omar Ayub Khan in his budget speech forcefully advocated the steps taken by the government to curb the profiteering and hoarding in the markets.

Perturbed over the price-hike phenomenon the government announced to involve the private sector in establishing utility stores in all Tehsils, towns and cities to supply basic food items at the rates lower than the market.

“The government has decided to establish utility stores in every Tehsil and city and it invites the private sector to get the franchise of utility stores,” said Omar.

The government has already enhanced the role of the Trading Corporation of Pakistan, which is being used as a tool to intervene directly or indirectly into the market affairs.

The TCP used to import, export, sell and buy commodities whenever government wanted to intervene to stabilise prices by creating a balance in supply and demand of a commodity. The TCP has been active in buying and selling of rice, sugar, cotton and the trading of these items involved billions of rupees.

The minister in his budget speech claimed that pulses’ prices were drastically cut and masoor will be available at Rs31 per Kg, mash Rs53, and mung Rs58.

He also announced to deploy price magistrate in the markets to check the prices. The decision shows that the government deems its presence in the market essential to protect the people from exploitation as was recently witnessed in the case of sugar and cement.

However, it looks difficult that the idea of price magistrates would be effective as implementation of any law at the grass-root level has never been successful.

The minister announced that a model vegetable market would be established in Islamabad to show how vegetables could be supplied at cheaper rates. He said all chief ministers of the provinces would establish the same model vegetable markets in their respective provinces.

On one side the government is making efforts to distract it from doing business, while at the same time it feels compelled to increase its involvement in the market activities.

The government has always been advocating that it has nothing to do with business and the idea is strongly reflected in its privatisation policy wherein several mostly profit-making organisations were sold.

The minister said that Rs1 billion was allocated for poultry industry, which was badly hit by the recent bird flue scare. The government will provide fertiliser at subsidised rates and subsidies worth Rs12.3 billion would be provided during the next fiscal year.