5 months ago

Govt move to curb Ramadan price hike

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The holy month of Ramadan is one of special significance for Muslims. Although it is supposed to be a month of abstinence and one that is supposed to teach devotees to be kind to those less fortunate, the market for essentials follows a pattern of increased prices across all food items. The last one year has been plagued by near double-digit food inflation and the people are tired of putting less food on the table. The authorities are taking steps to break with the past where stern warnings went unheeded and where wholesalers and retailers fleeced consumers to the best of their abilities.

This will be the first test for the new cabinet that has taken office with a lot of new faces and first-time ministers. Although the government had cut import taxes on essentials in the past too, such measures have failed to play any significant role in containing prices. The government is now importing in bulk, a lot of essential food items in the hope of making it quite impossible for hoarders to control the supply chain of foodstuffs. Of course, simply having ample supply of essentials has no effect on prices of food as has been widely experienced in the case of potato. The media may make as much noise as it pleases, but sadly, such news appear not to reach those in the driving seat.

That said, people are eagerly hoping for some relief during this Ramadan since authorities have been very loud in their announcements that special imports are coming in from neighbouring India and that duties have been slashed to keep prices down. According to a report published in this newspaper, the taxes have been reduced by nearly 50 per cent on rice to 15.25 per cent (from previous 62.50 per cent). Similarly, sugar should technically be cheaper as duty has been cut from Tk1,500 to Tk1,000 per tonne; duty on edible duty has been cut by 5.0 per cent and VAT on the same has been totally lifted (that was 15 per cent previously). The other Ramadan essential, date, has seen its import duty reduced to 15 per cent (a cut of 10 per cent).

These moves are certainly welcome news for millions of people. Although the ministry of commerce expects a lull in price hike since the most volatile price increases in sugar and onion in recent memory, import of these items are being expedited from India (which has an export ban on such items). The cuts in duty and import tax will cost the revenue authority (NBR) about Tk2.0 billion in lost revenue, but if the government doesn't take measures to cool down the retail markets during Ramadan, it may lead to mass discontent. "Tax benefits for edible oil, such as refined and crude soybean oil, crude palm oil and others including refined palm oil, would be valid till April 15, 2024." This means that market syndicates that have taken consumers for a wild ride with unheard of price increases will have no excuse to hide behind.

All these measures being adopted should bear some fruit. But as experience has shown, the punishment and penalty regime for rule-breakers remains sadly inadequate. Authorities that are supposed to act as monitors against errant traders and sellers have proved themselves to be less than effective in holding anyone to account. The paltry fines are laughable and since these do not hurt the overall profitability of traders, unscrupulous business entities continues to take the law for a ride. Will this Ramadan be different? One can only hope so.

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