Only raid not enough

The government believes that its crackdown on food importers, wholesalers and retailers will control the rise in prices of essential commodities. But without measures to smoothen supplies, we do not believe it is possible to achieve the desired result. The scoop down on warehouses and display of price lists at retail outlets streamlines trading operations. However, affairs in the market indicate that the government must think beyond that. One of the foremost requirements is to instantly take steps to dismantle supply constraints – the main reason behind skyrocketing inflation, which has created holes in consumers’ pockets and also threatened economic and fiscal fundamentals. It must also create an environment to allow the market to function freely and fairly. Unfortunately, so far, the government has not taken any action in this direction. This too is not surprising because the root of all the factors that have rendered our market dysfunctional lies in political fluidity, poor law and order situation and dirty politicking in which wrongdoers find sanctuary.



In order to arrest the rise in prices, the government has reduced agricultural reform fees levied on food imports. It has also annulled local development tax and scrap tax. Theoretically, those should slash prices of essential goods that Nepal imports. But, sadly, this has not been happening, thus bringing traders on the firing line. On the other hand, the government must know that practices like unknown groups levying toll by installing barricades along the highways has been ignored in the process.



Bandas, highway obstructions, forceful closures of manufacturing units and extortion of traders too go on unchecked. Like it or not, cost generated by these factors are transferred to consumers. Add to it the deep-running evil of transporters’ syndicates, which is illegal and also making a mockery of the country’s free-market economic policy. Over the years, such syndicates have eaten up the spirit of free-market operations depriving benefits to consumers by restricting entry of independent operators and also working as a cartel that largely exercise collective price fixing, something that is banned by law. Because of poor law and order situation and weak market monitoring authority, the traders too are reaping super normal profits.



The government must understand that multi-faceted dynamics of market cannot be streamlined by just relying on a single approach. The sustainable solution lies in setting up a system of effective market monitoring and strictly enforcing laws and regulations. Syndicates and unfair collective fixing must be banned. Problems of bandas and highway closures must be stopped and meaningful functional partnership must be established between the government and the private sector. Time has come for private sector organizations such as Federation of Nepalese Chambers of Commerce and Industry to strongly raise their voices against cartels and other unfair practices. Fair business pays all. No one knows this better than the business community. Hence, the government must mobilize the business community in this drive.

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