'The anti-food inflation package'

27 Feb, 2020

This is apropos a Business Recorder editorial "The anti-food inflation package" carried by the newspaper last Friday. The newspaper has plausibly argued that "there are a limited number of USC stores in the country, under 6,000 of which about 4,000 are operating, which are grossly inadequate to deal with 52 million customers and the situation is worse in rural areas that as per the Pakistan Bureau of Statistics are facing higher food inflation relative to urban areas no doubt partly because access to USCs is severely limited."

In my view, however, the 10 billion rupee subsidy package for the remaining five months of the current fiscal year to the Utility Stores Corporation (USC) - to be disbursed at the rate of 2 billion rupees per month - will be of little or no effect in view of the size of population in particular. Secondly, the lowered prices at utility stores will certainly lead to a big and sudden rise in demand that these stores would find it extremely difficult to meet. This step, however, suggests that the PTI government is still clueless insofar as the direction of country's economy is concerned. Announcing a subsidy or launching a livestock-distribution programme provides no real solution to the problem. Only can a higher growth rate accompanied by increased foreign investments create conditions under which government will be able to discover space for itself to deal with a variety of socio-economic challenges besetting the country.

Read Comments