The decision of the Baburam Bhattarai government to set maximum retail price (MRP) of eight edible commodities ahead of the festive season, though welcome, must be taken with a pinch of salt. The initiative being undertaken on direct order of the prime minister will reportedly set MRPs for rice, pulse, flour, edible oil, assorted beans, salt, sugar and beaten rice—all extensively consumed during Dashain and Tihar festivities. As the increased demand during these times often strips supply, wholesalers and retailers set arbitrary prices. In order to check this insidious practice, setting MRPs for essential goods looks like a good idea. At least on paper.
This is because many edible goods being sold in the market, from bread to packed juice, have MRP stamped on them (often in large, clear letters), but seldom do consumers get the goods at the written price. And when they question the retailer about a rupee that has been mysteriously added to MRP, the answers offered are vague, when not downright humiliating. It is not unusual for shopkeepers to ask their customers to go visit another shop if they don’t like the price on offer. This suggests the government move to set MRP too could fail without adequate monitoring mechanism. Indeed, it will not be easy to keep track of thousands of outlets dispensing edible goods with the limited manpower and budget at the government’s disposal. Even so, citing political parties’ failure to agree on a full budget as a major obstacle to proper market surveillance hardly inspires confidence in common man.
Additionally, it has been reported that the Ministry of Commerce and Supplies is preparing to raid go-downs of big businesses and producers to check black marketing. Again, not a bad idea. In the past, unscrupulous businessmen have hoarded basic necessities like LPG and sugar to create artificial shortage. There is no doubt that if the government is able to crack a whip on these businesses, common people would experience great relief. But again, given its constraints, it remains to be seen how the government will go about it, especially in face of past accusations of selection bias when it comes to raiding businesses.
If the goal is to help consumers, the government must be serious in its commitment to curb black marketing and price control. But its recent efforts give little hope. For instance, at a time the prices of basic commodities were already reaching for the skies, it once again increased the price of petro-products, right on the eve of the yearly festivities. If there is one surefire way to increase inflation in Nepali market, this was it. The increases in price of commodities across the range that result from increased transportation costs will easily swamp meager savings consumers make through the MRP scheme, if the scheme can be implemented with the desired effect at all. Yes, the government is undoubtedly facing serious budget constraints, but we also believe that if it cannot honor its words, it would be better not to give people false hopes. For the start, the Bhattarai government could show some genuine political will to help common people.
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