RAWALPINDI: Surge in Food Prices Post-Budget Announcement
The announcement of the federal and Punjab budgets for the fiscal year 2024-25 has triggered an unprecedented rise in the prices of essential food items in the open market. Prices of pulses, gram flour, and rice have reached historic highs, marking the highest levels in the country’s history. Even before the implementation of the proposed new taxes, negative impacts are already being observed in wholesale markets.
In many markets, the prices of essential food items have skyrocketed. Pulses and chickpeas have surged to Rs13,000 per maund and gram flour to Rs12,800 per maund. In retail markets, pulses are selling at Rs340 per kg, besan at Rs335 per kg, and split chickpeas at Rs565 per kg. This dramatic increase is primarily attributed to the announcement of the budget, which includes a significant hike in the general sales tax (GST) from 15 percent to 18 percent. This new tax rate is set to take effect on July 1, and the anticipation of this increase has led to widespread stockpiling of essential food items. Traders, anticipating higher costs, have started hoarding supplies, thereby creating an artificial scarcity that has driven prices to record levels.
The impact of these price hikes is not limited to dry goods. The Gawala Union has warned of a forthcoming increase in the prices of milk and dairy products after Eid, while the Meat Welfare Union has also threatened to raise the prices of meat. These anticipated increases are adding to the concerns of consumers, who are already feeling the strain of rising grocery costs. The soaring prices have created a sense of urgency among consumers, many of whom are rushing to purchase and stockpile essentials before prices rise further.
Pervaiz Butt, leader of the Central Grocery Association, has expressed deep concern over the situation. He has urged the deputy commissioner to convene a meeting of the District Price Control Committee after Eid to reassess and determine new prices for all essential items in light of the current market situation. According to Butt, the current price hikes are unsustainable and are putting an undue burden on ordinary citizens. He emphasized the need for immediate intervention to stabilize prices and prevent further exploitation of consumers.
The District Price Control Committee (DPCC) plays a crucial role in monitoring and regulating the prices of essential commodities. The DPCC is responsible for ensuring that prices remain within reasonable limits and that any increases are justified and necessary. However, the recent budget announcement and the resultant price hikes have highlighted significant challenges in the current system. The DPCC must now take swift action to address the rampant price increases and ensure measures to stabilize the market.
The recent price increases have not only affected individual consumers but also have broader economic implications. As the cost of living rises, the disposable income of ordinary citizens decreases, leading to reduced spending in other areas of the economy. This can have a ripple effect, slowing economic growth and potentially leading to higher unemployment rates. Moreover, the increased cost of essential goods can lead to higher inflation rates, further exacerbating the economic challenges faced by the country.
In addition to the increased GST, other factors are contributing to the current price hikes. These include global supply chain disruptions, currency devaluation, and rising fuel costs. These factors are making it more expensive to import goods and transport them within the country. As a result, traders are passing these increased costs onto consumers, leading to higher prices across the board.
The role of the government in this situation is critical. Effective policy measures are needed to address the root causes of the price increases and to provide relief to consumers. This may include subsidies for essential goods, stricter regulations on hoarding and profiteering, and measures to stabilize the currency and reduce fuel costs. Additionally, the government must work to improve the efficiency and transparency of the supply chain to ensure that goods are available at reasonable prices.
The announcement of the new budget has led to significant and unprecedented increases in the prices of essential food items. The role of the District Price Control Committee will be vital in addressing these price hikes and ensuring measures to stabilize the market. Immediate intervention is needed to prevent further exploitation of consumers and to provide relief to ordinary citizens who are already struggling to make ends meet. The government must take effective policy measures to address the root causes of the price increases and to ensure that essential goods remain affordable for all.
