Looming Large
Not only in Nepal , inflation is surging in next door neighbor India , too, triggering concerns for the poorer section of society
By SANJAYA DHAKAL
Inflation – that dastardly enemy of poorer communities as well as middle class families – has started raising its head.
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After a brief respite last year, the inflation has started to rise up rapidly reaching nearly 8 percent. According to the Nepal Rastra Bank (NRB), the rise in price of petroleum products, transport and food stuffs have trigged the rise in inflation. This data was revealed at a program organized by NRB recently.
The inflation for the fiscal year 2062/63 is said to have crossed 8 percent. Presenting a paper on the analysis of inflation, deputy director of Pricing Section of NRB Gopal Prasad Bhatta said that inflation was comparatively rising in the country. According to deputy governor Krishna Bahadur Manandhar, the rise in inflation will have adverse impacts on all other sectors of economy.
A report of the economic situation of the first five months of the current fiscal year, prepared by Nepal Rastra Bank (NRB) had showed that inflation had reached 7.3 percent during the period.
The concerns for the rising inflation has heightened since India – the largest trading partner with which Nepal conducts nearly 70 percent of its total trade – too is suffering from the same problem. The effect of increasing inflation in India is certain to cause serious consequences on Nepal , too.
The wholesale price index, India's closely watched cost-of-living indicator showed inflation at 6.58 percent, the highest reading since December 2004 and up from 4.04 percent a year earlier.
Even as India issued a fresh forecast that its economy would grow by stupendous 9.2 percent, the surging inflation – said to have been triggered by the rising cost of staple items such as garlic and lentils – is feared to hurt the poorer section most.
In the past 12 months in India , the cost of pulses has risen by 21 percent, food grains by 9.5 percent and fruits by 14.5 percent.
Needless to say, the rise in cost of food grains and lentils in India are certain to cause similar, if not more, growth of cost in Nepal .
Add this with the recent woes caused by prolonged Terai unrest. The paralysis of transport system and supplies facility had further caused hike in the price of essential items.
Even a full week after the cessation of unrest in Terai the normal supplies of petrol had not resumed as indicated by serpentine queues in the petrol stations. The shortage of fuel and essential goods are dangerous portent for the economy.
On the other hand, the Nepal Oil Corporation (NOC) still has over Rs ten billion to pay as outstanding dues to Indian Oil Corporation (IOC), which means there is also likelihood that the government could hike the fuel price anytime.
These are not at all rosy indicators as far as inflation in concerned. Inflation is regarded as the greatest enemy of poorer section of society whose earnings will not be able to sustain even their current level of life if market prices increase. Likewise, the middle class families with limited budget will also feel the pinch of soaring inflation.
Unfortunately, as political parties, civil society and the government remain fixated over political issues, unrest, agitations and the Constituent Assembly elections, the economic issues have been pushed to the backburner. As such, inflation is going to have a field day attacking the poor people of the country.
