Prices on the rise: Will the government succeed in controlling inflation?

The inflation reading spiked 8.72% in September, hitting the highest level in nearly four and a half years in the wake of an increase in prices of utilities, medicines despite a remarkable income tax collection by the Federal Board of Revenue (FBR).

The Sensitive Price Indicator (SPI) based weekly inflation for the week ended on September 17, for the combined consumption group, witnessed an increase of 0.71 percent as compared to the previous week.

As compared to the corresponding week of last year, the SPI for the combined consumption group in the week under review witnessed an increase of 8.72 percent.

FBR tax collection target exceeds

Federal Board of Revenue (FBR) has collected Rs 1004 billion in the first quarter (July to September) of the current fiscal year exceeding the tax collection target by Rs 34 billion.

FBR has done remarkably well in the 1st quarter of the current fiscal year. On the basis of State Bank of Pakistan (SBP)’s provisional figures, FBR has reported a net revenue figure of Rs.1, 004 billion exceeding the given target of Rs. 970 billion by a margin of 34 billion.

Income Tax collection for the quarter stood at Rs. 358 billion. Likewise, the collection of Sales Tax, Federal Excise Duty and Customs Duty remained at Rs. 426 billion, Rs. 56 billion and Rs. 164 billion respectively.

This is the first time FBR has managed to cross the figure of Rs 1 trillion in gross as well as net collection in the first quarter of a fiscal year. The gross revenue stood at Rs.1052 billion.

The inflation reading spiked 8.72 percent

Despite a remarkable income tax collection by the Federal Board of Revenue (FBR) the masses still under the grip of inflation as the government failed to control the prices of essential commodities.

The cost of every notable consumer item including medicines, beef, house rent, gold and cars increased significantly, affecting all types of income groups of consumers.

Prices are hurting consumers at a time when the economy is slowing down and many professional groups in the salaried class are facing job cuts.

The latest inflation bulletin has endorsed the central bank’s apprehension about persistent inflationary pressures, which have now led to the reversal of the two-month-old downslide in the inflation index.

Sensitive Price Indicator report

According to the Sensitive Price Indicator (SPI) prices of three items decreased, 26 items increased while that of 22 items remained constant. The items, which recorded a decrease in their average prices, included bananas, LPG Cylinder and potatoes.

The commodities, which recorded an increase in their average prices, included tomatoes, eggs, chicken, energy saver, washing soap, georgette, mash pulse, sugar, sugar, tea (prepared), onions, moong pulse, vegetable ghee (loose), cooking oil (loose), vegetable ghee (tin), firewood, masoor pulse, gram pulse mutton, wheat flour, garlic, milk (powdered), curd, rice (Irri 6/9), milk (fresh) and mustard oil.

Likewise, the prices of the commodities that observed no change during the week under review included rice (Basmati), bread, beef, salt, chilies, tea (packet), cooked beef, cooked daal, cigarettes, long cloth, shirting, lawn, gents sandal, gents chappal, ladies sandal, electricity charges, gas charges, matchbox, petrol, diesel, telephone call and toilet soap.

Utility Stores fail to satisfied public  

People have shown concern over the shortage of daily use items in about 70 percent in utility stores across the country. Despite tall claims by the PTI government, the utility stores corporation had failed to provide daily use items to the consumers.

The people had failed to get subsidized items, including sugar, ghee, rice, pulses and flour. The shortage of essential items in the utility stores had created tension for the people visiting the stores for getting edibles on subsidized rates.

On the other hand, utility store officials said that these essential items are expensive in the general markets and they are facing problems to fulfill customers’ demands due to the growing rush of people in the utility stores.

Wheat prices rise despite imports

Undoubtedly, Prime Minister Imran Khan has an idea of the suffering of the people who are sobbing in the face of rising prices, for which it has been decided to import wheat from Ukraine.

The price of imported wheat raised by around Rs2 per kg despite the arrival of several tonnes of wheat from Ukraine.

The imported wheat is now selling at Rs47.50 per kg compared to Rs45-46 per kg while the rate of locally-produced wheat has reverted to Rs51 per kg from Rs48 per kg.

The local wheat rate had fallen to Rs48 from Rs52 in the last week of August following the arrival of the first Ukrainian wheat consignment. Millers had reduced flour prices by Rs2 per kg prior to the arrival of the first ship carrying 60,000 tonnes of Ukrainian wheat.

However, retailers said the price would again crawl back to a high rate after rising prices in the open market.

People pinning hopes on government

At present, there is no control over the exorbitantly high prices being charged by the mafia, traders and manufacturers causing genuine hue and cry by the poor section of the population.

Prime Minister Imran Khan several times issued directives concerned authorities to take steps to control the prices of basic food items.

The premier also called the chief ministers of all four provinces to devise a strategy to control inflation despite orders no steps have been taken in this regard.

The parliamentarians are debating the issue in the house. The intentions of the opposition benches to initiate a heated debate in and outside the house on inflation appears only for the sake of criticism as they have not come forward with any support or suggestions to assist the government in controlling inflation.

The economic managers apparently have no control or solution to check the menace of the inflationary impact on the economy and are looking at it as mere helpless spectators.

People are now pinning hopes on the government to provide them a breather from whopping inflation and widespread unemployment.