KATHMANDU, SEP 15 -
It was brought to provide relief to consumers hit hard by soaring prices. But a day after the government announced the maximum retail price (MRP) of daily essential commodities, the move attracted more criticism than appreciation.
Consumer right activists are divided over the latest move. So are the two leading business bodies — Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and Nepal Chamber of Commerce (NCC).
FNCCI opposed the move, saying it is ‘against the principle of free market economy and immature’, while NCC welcomed it.
On Thursday, the government set MRP of 15 essential food items after holding consultations with the Nepal Chamber of Commerce (NCC) in a bid to curb artificial price hike.
In a strongly-worded statement on Friday, FNCCI demanded that the government roll back the decision and let the market determine prices.
“The market itself sets prices on the basis of demand and supply,” said FNCCI Vice-president Pasupati Murarka, adding that if the government wants to intervene in the market, it has to release goods at low prices from its entities.
FNCCI says the government’s move to fix prices is the ‘wrong way to control the market’ which could lead to shortages.
On the other hand, NCC said the government move was the need of the hour ahead of the festive season. “This is just a temporary measure to control the abnormal price hike,” said NCC President Suresh Basnet, adding that the government-set prices would be reviewed every week as per the demand and supply situation.
Consumers’ rights activists accused that the government set the prices without holding consultations with consumer rights forums and without carrying out a proper study on demand, supply, import price, producers’ and farmers’ costs. They also said the government failed to better mobilise its trading arms — Salt Trading Corporation, National Trading Limited and Nepal Food Corporation — effectively to intervene the market.
“Although the government buys sugar at Rs 52.50 per kg from local producers, it is selling the product for Rs 76 per kg through Salt Trading,” said Prem Lal Maharjan, president of National Consumers’ Forum. He added with the government setting a certain price, chances of prices coming down through competition are slim as the government has no mechanisms to
regulate prices countrywide. “This could lead to cartelling.”
The government plans to implement the set prices for the next three months bearing in mind the upcoming festivals — Teej, Dashain, Tihar and Chhat. Warning of stern action as per the Black-marketing Act, the government has cautioned traders not to overcharge consumers.
However, traders are yet to implement the government-set prices. Retailers said it would take at least a week for the provision to come into implementation.
Nepal Retailers Association has said it will circulate the new price list to retailers within 7-10 days.
“As wholesalers have agreed to offer goods at lower price, we will implement the MRP,” said Pabitra Bajracharya, president of the association.
Source: http://www.ekantipur.com/2012/09/15/business/bouquets-and-brickbats-follow-govt-decision/360269/
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