Under its proposal, Department of Commerce and Supply Management (DoCSM), which is leading the negotiations from the government side, proposed the rates that, which if agreed upon, would reduce the prices of rice, pulses and edible oil, among others, by 5 to 30 percent.[break]
“We pushed for higher cuts in prices because traders have been resorting to price cartel and are presently taking profits at pretty huge margin,” said Narayan Prasad Bidari, director general of DoCSM.
He, however, refused to disclose the exact rates that the DoCSM pushed for.
But private sector representatives did not agree to its proposal, saying the rate proposed by the government will sharply squeeze their profit margin, discouraging traders to continue with their businesses.
Instead, they proposed the government to set MRP by allowing traders to take as much as 10 percent profit on rice and 15 percent profit on other seven commodities. “The profit margin proposed by the traders is not unfair because it will be shared by all the players along the supply chain,” said Suresh Kumar Basnet, president of Nepal Chamber of Commerce.
He even said that the traders´ proposal, if agreed, will still make those goods cheaper by Rs 5 to 10 per kg. “This much of price drop is significant,” he told Republica.
Basnet too did not disclose the rates that traders wanted to set as MRP.
The DoCSM officials and traders had held the talks at the office of Chief Secretary Leela Mani Paudyal as the government has pushed the plan to fix MRP with high priority. Following the deadlock, the government postponed the meeting, giving traders another two days to rethink their stance and proposal.
“We will meet on Thursday again. Hopefully, the private players will agree to work with lower profit margin,” said Bidari.
The government on August 31 decided to fix the MRP of essential commodities -- including rice, pulses, legumes, oil, flour, salt, sugar and beaten rice, stating that existing rates were too high when compared to import rates or prices paid to the local producers.
While Commerce Secretary Lal Mani Joshi tagged the existing pricing as unfair and outcome of traders´ cartel, the government believes introduction of MRP on those basic consumable items would relieve consumers by doing away with high profit margin taken by the traders. Its implementation is said to lower the prices of those items significantly as well.
However, as the initiative of the government to regulate the prices does not match with the long-practiced liberal economic policy, the private sector had opposed the idea initially. Now they have agreed to comply with the decision.
The government has said that the MRP set now will not be changed till Chhath -- that is until the festive season ends.
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