At present, the whole world is grappling with the problem of inflation, while the prices of essential commodities are increasing due to different problems in each country. Problems around the world are growing because there is a clear gap between supply and demand, mainly because the coronavirus has frozen the entire system and shut down businesses.
During the lockdown, the use of item were also decreased. However, as soon as the deadly pandemic brought under control, people started looking for beautiful things for their luxurious life along with their necessities. And the lust for the use of excessive things captivated man.
The supply chain in West was disrupted due to labor shortages and the industrialists failed to maintain the quality of their goods. Meanwhile, the labors were also demanding an increase in wages. As a result, there was an increase in costs, but there were some factories which, instead of meeting the demands of the workers, reduced the number and also reduced their production, which created an imbalance in the market.
At the same time, demand for oil and gas from the industries at full capacity increased, this led to an increase in oil and gas prices. The restoration of air services and vehicles on the roads led to a sharp rise in fuel consumption and the immediate demand put pressure on refineries and the shortage led to a rise in petroleum prices.
Speaking of Pakistan, inflation increased here only because the cost of factories increased due to rise in the prices of electricity and gas. As a result, all commodities became expensive and as the government continued to import various commodities, the pressure on the rupee began to skyrocket in Pakistan.
The State Bank of Pakistan failed to take some measures to control the rising value of the dollar. When inflation is high around the world, interest rates are lowered so that people can easily borrow and do business, and factory costs are lower. During the pandemic, when the interest rate was reduced, Pakistan increased its exports despite restrictions and inflation was under control.
Unfortunately, during the coronavirus, the government did not formulate any policy on how Pakistan can take advantage of this situation if the outbreak is controlled worldwide and the demand in the world market will increase. There was a strange state of confusion in the government and everyone was nervous and for no reason the government started importing various items at high prices.
If the government had estimated in advance that there would be shortage of flour, sugar, ghee and other commodities after controlling the epidemic, then we should have imported cheap items from the world market at that time but our government did not paid attention.
We will not be able to control inflation in the coming days as the government is busy collecting taxes. Without a plan, it is being said that things will get cheaper in the next 3 to 6 months. Things will be cheaper and Pakistan will develop when our government’s focus will be human rights.
In order to reduce taxes in Pakistan, the GST will have to be reduced first because at present the government collects money through GST which affects the income of the common man. If the government reduces GST from 17% to 9%, the prices of all commodities will fall and stabilize, while poverty could be decline.
At the same time, power plants should be audited and by reducing their unreasonable prices, relief can be provided not only to the industries but also to the people. To control the rapidly rising prices in the world market, the government will have to come up with a future action plan and create a better public transport system to reduce the use of petrol and diesel.
