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August 5, 2020

Erasing the poor


August 5, 2020

LAHORE: This government will be completing its two years by the middle of this month. Past 24 months have proved to be a nightmare for the entire nation particularly the poor. Statistics released by government itself reveal the entire story.

Every government complains that the media shows only one side of the story on government performance. This is what the Pakistan Bureau of Statistics states about the prices of numerous essential daily use items, particularly edibles.

The price data that the PBS released on average prices of different item at the end of August 2018 was chosen as a reference price when this government assumed power and the data on prices released at the end of July 2020 to find out the difference in prices of essential items in past two year.

It may be pointed out that many rates would look low to consumers in big cities as rates quoted are the average obtained for each month from different cities and towns of the country. The prices of vegetables and fruits although high in most cases were not considered, as these vary from season to season.

Before analysing the impact of prices, let us have a look at the government performance on some broad parameters like GDP growth, revenue collection, inflation, and employment, which have been pathetic.

Two years of GDP growth achieved by this regime is less than half the GDP growth posted by the PML-N regime in its last year. In fact, as the things stand now, even the combined growth of first three years of this government would be less than last faltering year growth of PML-N.

Unemployment has jumped from 5.8 percent in 2017-18 to around 8.8 percent. The rupee has depreciated from Rs155 against the dollar to Rs167. While countries with stable exchange rates benefited from lower commodity prices in recent past; our consumers ended paying more for not only imported commodities but on domestic items as well, as devaluation has ripple effect all over.

The most depressing aspect in this regard is that incomes of most citizens have declined instead of increasing. The number of jobless persons has also increased by at least two million according to some creditable economists.

Under these circumstances, increase in cost of living becomes unbearable for households. They make compromises on health, education and even on quality food. Coming to prices of some items it is worth noting that wheat is the staple food of the country.

Average wheat flour price in August 2018 was Rs38.50/kg and in July 2020 it has increased to Rs50/kg –an increase of Rs11.50 per kg. Wheat consumption in Pakistan has been estimated to be 110kg per year or 9.16kg per month.

Average family of 6.5 would thus consume 59kg of wheat per month (9.1x6.5=59). In August 2018, the cost of 59kg of wheat was Rs2,271 at the rate of 38.5. Now the same quantity of wheat costs Rs2,950.

This means an additional burden of Rs679 in monthly family budget. Irri rice price during the same period increased from Rs50/kg to Rs68/kg. Beef with bone was available at Rs374 per kg when this government assumed power and now it costs Rs455 per kg.

Mutton prices have increased from Rs782 per kg to Rs956 per kg. Chicken live was available at Rs122.81 per kg and in August 2020 its price has increased to Rs195 per kg.

It may be pointed out that the end user gets around 900 grams of chicken meat from 1.5 kg of live chicken so the price is near 290-300 per kg. Fresh milk is now Rs14 per litre, expensive than it was in August 2018.

Cooking oil was retailed at Rs191 per kg in August 2018; now the cost of one kg cooking oil is Rs255. The rates of some pulses increased sharply.

For instance pulse mash was available at Rs117/kg when this government assumed power. Now it costs Rs242/kg.

Pulse moong price increased from Rs146/kg to Rs247/kg. Refined sugar averaged Rs55.59/kg in August 2018, which now costs Rs80.90. These edibles have cumulatively added additional Rs3,000 in monthly budgets of poor families (vegetables included).

The above list relates to some essential edibles. The cost of living even otherwise has increased at almost the same pace as that of edibles. These include transport charges, power and energy rates, house rent, school fee and water charges. The PTI government should go for a reality check and make efforts to reduce the burden on common man.