Pandey Vows to Nail Market Manipulators

Political instability and monopoly by businessmen are behind the current price hike. A handful of businessmen are exploiting the transitional period, said Finance Minister Surendra Pandey in a post-budget and price hike interaction here today.

Pandey said, "I have heard Nepal's supply system is in the grip of 15-20 businessmen and they are hoarding," he said, "If it is true, we take strong action." However, he did not clarify what action.

The government is bent on curbing the price hike by either taking action against black marketeers or resorting to market intervention. It is also studying the possibility of stocking basic commodities like rice, lentils, wheat, edible oil and sugar.

National Planning Commission (NPC) vice-chairman Dr Yubaraj Khatiwada, who also coordinates the high-level price reduction committee, said inefficient supply mechanism has caused price hike. "I don't deny there is hoarding, but it is more a supply problem," he said, "The price of consumer goods has not increased equally across the country."

India's ban on consumer goods is a cause of price hike, Khatiwada said. "My committee has advised Prime Minister Madhav Kumar Nepal to talk to the Indian government about it during his upcoming trip," he said. If Nepal cannot get sufficient food grains from India, it should buy from other countries, he said.

Nepal's food grains production is insufficient for a year. According to an estimate, Nepal is facing a shortage of 1,32,000 metric tonnes of food grains this year. The current stock is only sufficient for 2.6 million people for 13 days.

The seven months long drought in winter and late monsoon will cause problems in the fiscal year 2009-10 also.

"Businessmen know it, and they are manipulating prices," blamed Jyoti Baniya of Consumer Rights Protection Forum (CRPF). He said five forces -- middlemen, transport syndicates, bandhs, road blockades and a weak government -- are responsible for skyrocketing prices.

"There is no alternative to bringing the black marketeers to book," he said.

Kiran Nepal, president of the Society of Economic Journalists of Nepal (SEJON) identified political instability and dependency of political parties on businessmen for donations as a major cause of the price hike. "Can a government dare fight with businessmen if it has been installed by their donations?" he asked. According to Nepal, a single day of bandhs and road blockades is increasing prices by one per cent. The major transport route, BirgunjKathmandu highway, remained closed for more than 200 days last year.