Its tradition: the ousted government leaves behind a number of issues such as foreign exchange reserves, fiscal deficit, circular debt, International Monetary Fund loan instalments etc to keep the new government under pressure. But the PTI government in its 3.8 years tenure has left the low- and middle-income groups in limbo due to the unchecked skyrocketing prices of essential food items.

High prices can be partially managed by counterchecking manufacturers’ claim of the high cost of production due to exchange rate parity, world prices and soaring freight rates. The previous government never called upon powerful food item makers to justify price hikes, thus giving them a free hand to increase prices without fear. The same freedom was also enjoyed by retailers and market forces.

More surprisingly, former prime minister Imran Khan a few days before his ouster had rubbed salt on the wounds of consumers by saying that he was not in politics to know the prices of basic items like tomatoes, onions and potatoes and his objective was to build Pakistan. Mr Khan was more concerned with rising exports, large scale manufacturing, figures of Roshan Digital Account, Ehsaas Program, health card, current account deficit, etc rather than taking any interest in controlling food inflation.

While failing to keep a strict vigil on manufacturers, hoarders and profiteers, the previous government had also ignored those who reduced the weight of milk-related products, tea, edible oil, confectionery and bakery items, forcing consumers to pay high prices for shiningly packaged lower quantities.

High prices have also forced people from low-income groups to restrict purchases while others are taking up small loans to meet their requirements

In April 2020, the Imran Khan government issued an ordinance declaring hoarding a punishable crime with the culprits facing three years in jail, trials, heavy fines of up to 50 per cent of the value of seized goods and confiscation of stored products. The decision failed to make big recoveries of wheat and sugar from the hoarders. Even wheat smuggling within provinces and to Afghanistan also continued unchecked.

The cabinet meetings and weekly Price Monitoring Committee Meetings also proved routine official duties and could not bring any relief to the masses and on many occasions, prices went up after the meeting.

High prices have also forced people from low-income groups to restrict purchases while others are taking up small loans to meet their requirements.

A tough road is ahead for the new Prime Minister Shahbaz Sharif to curb the intensity of already high food prices as any meagre fall in rates, up to 50pc, will prove to be peanuts for consumers.

Price comparison of when Imran Khan came into power in August 2018 and on the day he departed reveals the most shocking rise in ghee and cooking oil to over Rs500 per litre/ghee as compared to Rs180-200. A 10 kg flour bag now costs Rs800 as compared to Rs350 while chapati and naan prices have swelled to Rs12 and Rs15-20 per piece from Rs6-7 and Rs10 per piece.

Sugar price has seen a phenomenal jump up to Rs140 per kg last year while it has now settled at Rs85 per kg but it was much lower at Rs65 per kg in August 2018.

Consumers still remember paying up to Rs500 per kg for tomatoes.

Gram pulse, Moong and Masur are now priced at Rs160-200, Rs160-220 and Rs210-240 per kg as compared to Rs95, Rs90 and Rs80 per kg respectively. Huge imports of wheat and sugar also could not bring any price relief.

Head of Research Pak-Kuwait Investment Company, Samiullah Tariq said “the price cannot be reversed instantly. The new government should focus on increasing the production of local crops, especially wheat and sugarcane. This will help bring down prices, lower dependence on imports and create an exportable surplus.”

Patron Karachi Wholesalers Grocers Association (KWGA), Anis Majeed said the prices can be brought down gradually by controlling the rupee fall and diesel prices besides making plans to boost the productivity of local crops. The new government needs to manage wheat and sugarcane crops, while strictly checking smuggling and hoarding that was rampant during the previous government’s tenure, he said. “I am not in favour of providing any subsidy on food items for which huge amounts of money is spent by the government and its impact is not passed on towards consumers,” Mr Majeed said.

Shahbaz Sharif in his first address to the National Assembly had announced the supply of subsidised wheat flour under a Ramazan package followed by measures to address the high prices of electricity.

In an urgent meeting with economic experts, Prime Minister Sharif issued directives to ensure relief for the masses, including the provision of low-cost edible items at sasta bazaars, and also stressed its strict monitoring.

He said he would not tolerate any irresponsibility in ensuring the provision of inexpensive commodities to the general public.

The dollar has fallen to Rs181 from Rs188 in the interbank market after the change in the government but higher freight charges, domestic petroleum prices based on world crude oil price movement and the impact of the Ukraine-Russia war on oil and commodity prices are still serious concerns for the new government to provide any price relief to the masses.

Published in Dawn, The Business and Finance Weekly, April 18th, 2022

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