Inflation hits six-year high

As recently as fiscal year 2001, inflation was as low as 1.94 per cent. However, since then, it has been rising steadily. The poor aman crop this season, mostly due to the fall-out from this year's flooding, is a major factor in the recent surge in the price of food, which has fueled the galloping inflation rate. In addition to this, global inflationary trends have raised the price of imported goods, which has also been a contributory factor.

There can be no doubt that the poor, especially the rural poor, have been bearing the brunt of the crisis. The precipitous rise in the price of food has greatly impacted those occupying the bottom rung of the socio-economic scale who have seen their purchasing power dwindle steadily. Nor have the middle classes remained unaffected.

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What can the government do to alleviate their miseries? One salutary step would be the lifting on restrictions on the import of rice to help bring the price down. Of course, since the restrictions are in place to help local growers and dealers, this is not a simple task, and the government must be careful as to where it strikes the balance. But with a poor aman harvest anticipated, ensuring adequate supplies of food must be priority number one.

In addition, the government must take stronger steps to crack down on the hoarding and speculation which has driven the price of rice up even further, and on extortion, the cost of which is passed on to the consumer in the form of higher prices. The current high rate of inflation may be largely due to factors over which the government had little control, but there are certainly measures that it can now take to address the issue and ease the plight of the public.