Editorial - Price bomb - Thursday, March 17, 2011

Source : http://thenews.com.pk/TodaysPrintDetail.aspx?ID=36636&Cat=8

The price bomb hurled at people through a presidential ordinance as a means to bypass parliament will send tens of thousands across the country reeling as they face new taxes totaling Rs 53 billion and a consequent increase in the price of virtually every commodity. Electricity will become more expensive as a surcharge of two percent on every unit is added; the salaried class – who already pay the bulk of taxes in the country – will now pay more with a 15 percent surcharge placed on income tax. Sales tax exemption on a wide range of items has been withdrawn under the Sales Tax (Amendment) Ordinance 2011 which imposes the new measures. The impact of the measures taken, which aim to achieve the new target of Rs 1,604 billion set for the remaining quarter of the current fiscal year, will be as considerable as that of a bomb exploding amidst a teeming throng of people.

The prospect of yet more inflation at a time when people can barely make ends meet in the first place is deeply disturbing. Worse still is the deceit inherent in the measures taken following negotiations with the IMF. The imposition of the surcharges and withdrawal of exemptions through an ordinance means that representatives are denied the opportunity to express their views. The core of democracy has been damaged by action from an elected government. Efforts to fool people in other ways have also been made. The GST on sugar for instance has been ‘retained’ at 8.5 percent. Only a close reading of the fine print reveals that it is now to be charged on the ex-factory price of Rs 55 a bag rather than on the previous Rs 28 per kg. In practical terms, this means an increase of seven to eight rupees per bag. The prices of various other kitchen items will go up too. It appears that even the right to eat is to be snatched away from the people. It is likely that we will see public anger soar over these new steps. Opposition parties are likely to make their opinion known in no uncertain terms, as they did when PoL prices were raised last year. The government’s indifference to the people’s condition is terrifying. Citizens are simply not able to keep themselves afloat. The question they ask is how long can this continue and what will the final outcome be. We have been in a state of crisis for so long it is hard to imagine it can grow any worse. Yet, this is precisely what we are seeing, leaving us to wonder how long it will be before chaos breaks out across the country, and people pour out into the streets against a government that has consistently treated their concerns with disdain.

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