KARACHI, July 2: Inflation measured through Sensitive Price Index or SPI shot up by 12.02 per cent at the last week of 2003/04 over the same period of 2002/03.

SPI reflects the average change in the retail prices of 53 most essential items of daily use.

It records price changes not only for the combined group of all types of households but also for four separate groups, two of which are in lower income bracket.

Data released by Federal Bureau of Statistics shows that SPI inflation for households with monthly income up to Rs3000 shot up by 13.27 per cent year-on-year in the week ending on July 1, 2004.

For households with monthly income up to Rs5000, SPI showed an increase of 12.48 per cent and for those whose monthly income reach up to Rs12, 000, it depicted a rise of 12.07 per cent. The data shows that yearly SPI inflation was the lowest at 11.49 per cent for the households whose income exceeds Rs12,000 per month.

This breakup of inflation measured through SPI reinforces the view that in Pakistan the incidence of inflation is progressively higher for the poorer people. The lower the income the higher the inflation, serves as a crude reality check for those who count the benefits of the economic revival in terms of its trickle-down impact on the common man.

This trend has become so established that even weekly inflation measured through SPI confirms it. FBS data shows that in the week ending on July 1, 2004, SPI witnessed the highest increase of 0.66 per cent over the previous week, in case of the households with monthly income up to Rs3,000.

For those with monthly income up to Rs5,000 weekly rise in SPI was 0.64 per cent followed by 0.58 per cent for the households whose monthly income is up to Rs12,000. But for those whose income exceeds Rs12,000 per month, the weekly SPI inflation was the lowest-only 0.39 per cent. For all the groups combined, it was 0.51 per cent.

The economic managers say they are mindful of a higher incidence of inflation for the poorer sections of population and claim that the government has raised pro-poor spending to provide them relief.

The government says it disbursed Rs2.2 billion under Food Support Programme in the third quarter of the last fiscal year, up from Rs2 billion in the same period of last fiscal year.

Official data shows that the government also raised food subsidies to Rs4.3 billion from Rs3.2 billion and increased Zakat disbursements to Rs3.7 billion from Rs3 billion. During the third quarter of last fiscal year ending in March 2004, availability of micro credit also rose to Rs6.2 billion from Rs4.8 billion.

Whereas higher spending under the above-named pro-poor programmes is encouraging, there is a need to extend per family disbursement under these programmes and extend their coverage areas.

For example, the government should immediately increase monthly disbursement of Rs200 per households under its Food Support Programme. For an average households comprising five persons, this disbursement comes to Rs40 per head per month, and is undoubtedly too little to give them two square meals even for a few days!