UNPRECEDENTED inflation rate in a few years has eroded people鈥檚 purchasing power, leading to a decrease in food and health spending. After the fall of the authoritarian Awami League regime, inflation eased in August but remained at over 10 per cent, as prices of goods and services continued to skyrocket. In an effort to contain prices, the interim government recently set prices of some goods, but it has failed to enforce the prices. The livestock services department on September 15 set the price of eggs at Tk 11.87 a piece and broiler chicken at Tk 179.59 a kilogram, but they are sold for prices higher than what the government set. Prices of vegetables and rice also increased in the past week. Traders and retailers insist that heavy rain has caused a supply disruption and resulted in the increase. Traders attempt at justifying the increase, defying the government prices, has been their business-as-usual response. The government effort should, therefore, focus on preventing this market manipulation through close surveillance and strict enforcement of market regulation.
In August, the finance, commerce, and science and technology adviser said that a quick decline in prices of all goods was unlikely to happen because it would take time for inflation to ease. In August, the Consumer Price Index stood at 10.49 per cent, but food inflation declined to 11.36 per cent from 14.10 per cent in July. The government has, however, taken a number of steps, including the reduction of duty on the import of onions, potato and pesticide to contain prices of everyday goods, but price syndicates appear still active and maintaining the market control. The artificial crisis of specific goods orchestrated by syndicates is also evident in the way traders and retailers responded. The Awami League government turned a blind eye to this unethical and illegal market behaviour and hardly took strict action against traders. In this context, the High Court in January asked the Awami League government to form a high-powered committee to identify people responsible for the price increase and build infrastructure for farmers to sell and buy locally, which remained unimplemented. The interim government needs to address the enforcement failure in market control and price stability.
The government should, therefore, take strict steps against the price syndicate and break their control of the market. In doing so, it should explicitly tackle the problem of market monopoly and subject individuals who violate the law to legal action. It should also acknowledge that the burden of inflation is unequally borne by the poor and low- and middle-income households with no mechanism to address inflation inequality. It should also provide support for poor and limited-income households by expanding its reach of social safety net programmes.
