Containing Inflation By: Mohammad Arifeen - Articles Detail
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Containing Inflation  Back
By: Mohammad Arifeen
Mohammed Arifeen

The government has totally failed to control inflation. The common man is facing skyrocketing inflation combined with high unemployment, a decline in growth rate and decreased currency value, and high food and fuel prices.
The current increase in petrol, diesel and CNG rates has pushed millions of people into a state of hunger disease and poverty.
Inflation has hit the common people in the past four years the lower income section of the society followed by the middle income group.  Almost all essential commodities have gone up from 150 to 300 percent in the past four years. Bad governance and massive corruption are some of the major reasons for this rising inflation in Pakistan.
Inflation is caused by the print of unlimited money without increasing the amount of material like gold. The government forces the State Bank to print money in the name of running development project and job creation.
More than 60 percent of the poverty stricken people in the country are still facing food insecurity due to incomparable high food inflation prevailing in the country.
The government has failed to provide any relief to the general masses. The rate of unemployment has increased to more than 10 percent due to energy crisis that has declined the industrial production.
The overall consumers faced around 11.40 percent price rise during 11 months in the fiscal year 2011-12.
Increase was witnessed in commonly used moong and channa pulses, vegetable, edible oil, vanaspati ghee, rice etc.  The high power rate troubled the families of 99 percent of the poor section of the society.
 Due to the massive hike in electricity rates, combined with increase in the rates of fresh milk and wheat flour the weekly inflation monitor Sensitive Price Index (SPI) recorded significant soar in inflation for the middle and the lower middle class of the society.
According to Finance Minister Dr Abdul Hafeez Sheikh while releasing the Economic Survey of Pakistan 2011-12 stated that inflation measured by CPI had maintained a steady decline over the past three years and stood at 10.8 per cent in 10 months of the current year while it was 13.8 per cent last year.
The overall rate of inflation over the last two years (April 2010-April 2012) went up by 25 per cent.
In this context immediate steps are needed to boost industrial production to increase the purchasing power of the downtrodden stricken people. Stable prices are to be maintained at all cost to uplift the life standard of poor and fixed income citizens who are the most weak in society.
An appropriate food security policy must be adopted to control essential food prices to provide relief to hungry million of poor people of Pakistan who are suffering from severe food inflation.
State Bank should strictly tie the creation of money to the creation of stuff. Reduction in the governments spending is necessary to stop new money from entering the system.
Opening of utility stores corporation may not be able to control inflation permanently and the solution lies in rapid industrialization for creating substantial employment in the country.
To control inflation requires fiscal reforms. Tough measure such as austerity is   needed for the stability and progress of the country. To get rid of bank borrowing and finally to cut back the expenses on debt servicing, the government should expand tax base.
The government should also reduce tax rate and increase number of assesses. Also, the Federal Government needs to regulate the trade deficit more effectively, which is presently depended on the huge remittances by the overseas Pakistanis.
 One of the reasons of inflation is prevailing rampant corruption in all the government departments. The accountability law should be enforced strictly and across the board accountability be done to control the corruption.  
Controlling inflation and price rise should be the priority areas before the government for which all out sincere efforts should be made.