FINANCE Division has issued a detailed statement rejecting news reports published on the basis of a news article in an online international newspaper claiming that the ‘voters, traders feeling pain of the government’s economic plan’ due to what the report suggests as rising inflation and other reasons. It pointed out that the media reports while referring to increase in prices did not take into consideration the major causes behind this rise.
Whatever the reasons but the fact remains that the country was witnessing unprecedented inflation and the main reasons, as acknowledged by the statement itself, are the measures introduced by the Government with the intention of curing malaise of the economy. The statement admits that inflation is due to sustained pressures on twin deficits which induced the Government to adjust administered prices upwards and also impose regulatory duties on imported items, supply constraints of certain food items and imposition of FED on cigarettes and the impact of rise in fuel prices and exchange rate depreciation. These are the very reasons which are being agitated by masses as the Government has increased pressure on them without looking at the capacity of the citizens especially vulnerable segments of the society to absorb the shock. No one would dispute the contention of the Government that there was dire need to expand the tax net and increase revenues but there are other steps that were avoidable. These include unjustified depreciation of rupee against dollar that has not led to desired increase in exports but added to the country’s debt and a surge in prices. Similarly, frequent upward revision of POL prices despite fall in oil prices in the international market and hike in electricity and gas tariff have also contributed significantly to price-hike. The Government could have avoided tariff increase by reducing line losses and plugging electricity and gas pilferage. There was also absolutely no justification for imposing duties on food items. We hope the authorities would review these measures to provide relief to the masses.
