The Daily Star, 09 May 2008

 

AFTER months of wrestling with higher prices, marked by a recriminatory phase in the government-business relationship, both sides seem to have arrived at a common ground at long last. The FBCCI has formed a composite taskforce comprising representatives from business community, consumer rights protection association, ministries concerned and joint forces to monitor price situation in retail and wholesale markets and implement measures to keep the prices in check.

We have tried to make the point before that an initiative from within the business community is a much better option for keeping the prices down than market intervention by other quarters. In fact, the confidence building measures attempted from time to time to secure cooperation of businessmen did not seem to carry conviction in the face of an interventionist approach that were willy-nilly taken to the market.

The experts have identified the main obstacle towards effective forecasting and monitoring of market behaviour as lack of reliable data on demand and supply. Now this shortcoming is sought to be removed by the new taskforce designed to collecting, preserving and updating information on daily prices of essentials including commodity-wise details of supply and demand and production profiles. To top it off, it will publish weekly and monthly reports on export and import, stocks, market trends etc. The whole idea is to make possible well-informed decisions based on effective analysis.

It is thus that the prevailing disconnect between the business community and the consumers on the one hand, and that between the government and the traders on the other will have been overcome by building bridges between the stakeholders. It is good to see that manipulative hoarding is being separated from genuine stockpiling to meet scarcity situations. We are also heartened by the FBCCI tasking itself with the responsibility of putting in measures whereby prices wouldn’t rise before or during the month of Ramadan. The FBCCI president is hopeful of the taskforce bearing results within next four to five weeks.

To our mind, there are three prerequisites for the success of the new move: first, the government’s efforts to build confidence with the trading community must be tangibly complemented by facilitating private sector import; two, impetus must be provided for greater national productivity; and three, the business community should demonstrate a social commitment to easing the plight of the low and middle-income groups.