Prime Minister Imran Khan on Monday (November 11) ordered the creation of a special cell for integrated planning on demand and supply of essential commodities in order to control their prices.
Soon after the prime minister presided over a meeting of his economic managers, his Adviser on Finance Dr Abdul Hafeez Shaikh, accompanied by Minister for Economic Affairs Hammad Azhar, Finance Secretary Naveed Kamran, Federal Board of Revenue (FBR) chairman Shabbar Zaidi and Special Finance Secretary Omar Hameed Khan, appeared at a news conference to defend the government policies and elucidate steps they could or have been taking on the pricing front.
They were questioned about the increase in prices of various kitchen items, especially vegetables and fruits, and the policies that triggered the inflation. Some questions were also related to the prices of tomato going beyond Rs300 per kg in some cases.
Dr Shaikh said the government was not responsible for taking any measure that led to price hike. He claimed credit for releasing wheat stocks in the market during shortfall and for not borrowing from the State Bank. He also pointed out that no currency had been printed over the past four months.
A journalist reminded him that the record high policy rate of the central bank, peaking interest rates and currency depreciation had played the central role. The journalist further asked why the government was offering discounts on interest rates to a few select areas instead of reducing the whole policy rate?
Dr Shaikh said the discount rate setting was the role of an independent monetary policy committee that comprised of well known independent economists. He further added that there were also some people who had invested their lifetime’s worth of savings in banks, like pensioners, with a hope of high returns.
The PM’s adviser said the government was now focusing on reducing prices. He pointed out the steps government has taken to improve supplies when prices went up, recalling the government had released about 650,000 tonnes of wheat from public sector stocks when flour prices started going up and the move had a positive impact in the market.
Another questioner asked Dr Shaikh why he was not moved by tomato being sold for Rs300 and onion Rs120 per kg. He repied: “From where [you] are quoting these prices, where the prices [are] increasing? The tomato price in the Karachi vegetable [market is] Rs17 per kg.”
According to an official statement, the meeting chaired by the prime minister was informed that effective administrative and policy measures were being taken to control sugar prices and special focus was on discouraging hoarding and profiteering. It was told that provision of Rs6 billion to the Utility Stores Corporation approved by the prime minister would go a long way in significantly reducing the prices of essential commodities. The prime minister was informed that sugar stocks availability was satisfactory in the market.
The adviser on finance told the prime minister that they were now dedicating all their efforts on providing every possible relief to the people. He informed that they would continue working towards strengthening economic stability and extending maximum facilitation and ease of doing business to the investors and business class.
The prime minister ordered the creation of a special cell for integrated planning on demand and supply of essential commodities, that should work under the national food security and research ministry. They should present measures for comprehensive administrative and planning on demand and supply to ensure the prices remain under control.
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17 November, 2019