The government is set to make an upward price adjustment of power, gas and fertiliser in one go for what it said as a measure to lower subsidy burden and to keep the budget deficit in a ‘good shape’. Reports published in national dailies on Thursday, quoting a high-level Finance Ministry senior official, said the administration is for immediate adjustment, if possible, within the first couple of days of the coming year. To him, there is no alternative but to adjust the prices of electricity, gas, and fertiliser. A meeting held in this regard did not take any decision on lowering fuel-oil prices, which the government raised in November amid price hike of the items in the international market. The government that time pledged to lower the oil price when it declines in the global market.
Many hunched that the government will backtrack from its commitment. Exactly, that is happening now despite the fall in fuel-oil prices abroad. Justifying the keeping of fuel-oil prices at its present rate, an official of the ministry said interest payment and subsidy remain as main challenges for this year and the same challenges will persist next year too. About the fertiliser sector, experts are of the view that low efficiency of the officials of the state-run factories have been an open secret for years. The wastage has already stressed the country’s fast depleting natural gas reserve and caused huge production losses.
Increase in fertiliser prices will hit the farmers hard. And they will be less interested in farming and thereby push the country towards food deficiency. In spite of this risk, the meeting came up with such decisions to keep the budget deficit tamed. In a balanced budget, the total expected revenues of a country are equal to total planned spending, as per economic formula. It is obvious that the farmers are going to be under pressure due to fertiliser and electricity price hikes. This pressure will eventually be passed on to consumers. We think people’s suffering due to the recent spike in daily commodity prices will get worse. Instead, we suggest the government should reduce taxes and duties on these items. Again stopping a huge amount of money that is being siphoned off the country every year under the guise of trade and commerce will also create savings.
