Motion on establishing a special committee to resolve the inflation not passed

Khengkhar-Weringla MP  Rinzin Jamtsho

SONAM PENJOR

Thimphu

The Member from Kengkhar-Weringla constituency, Rinzin Jamtsho moved the motion on 24 June to establish a special committee or a joint committee at the earliest to carry out an in-depth study to resolve the escalation of prices of goods and services. However, the motion was not passed with 14 ‘Yes’, 21 ‘No’ and six abstain out of 41 members present.

According to the Member, the country produces limited domestic products leading to higher imports which have negatively impacted the balance of trade for the country, increased challenges to the growth of domestic industries, and led to the depletion of the foreign currency reserve.

The Member submitted that the current inflation rate is reported at seven percent.

He acknowledged that the Government is indeed continuously working to resolve the issues but without effective regulation and monitoring, prices continue to escalate with no sign of reduction.

“These have been detrimental and present challenges in achieving self-sufficiency and economic development of the country,” he added.

In addition to all the challenges, he further said that the situation has been aggravated by the Covid-19 pandemic and one of the greatest problems faced is the increasing price of goods and services. For instance, increasing price of rice, cooking oil, fuel and transportation cost has made livelihood very difficult.

He said that the increase in the price is not only with the essential items but also with the services that the country availed.

“We are aware that the government is responsible for monitoring, controlling and regulating the inflation rate. In the current situation, the government has firstly informed that the prices of goods have increased from the source and industries.”

Further he said that due to the pandemic, transportation of the goods must be passed from one gateway and there is a need to change drivers of goods transported, which has contributed to price rise. Finally, it has been informed that prices have been caused by the ongoing war in the international arena. Further, as per reports of the government, the current inflation is reported at seven percent.

However, it is important that the government must understand the ground realities. Prices of goods and services have increased at exorbitant rates all over the country affecting the poor farmers, said Rinzin Jamtsho.

Although the government continues to work to resolve the issue, he said that without effective regulation and monitoring, prices continue to escalate and there is no sign of reduction. “This will in the long run not only affect the poor farmers but will also affect the transportation sector, industrial sector and government development plans and programs, and might eventually lead to the dire situations.”

He said that the price of edible oil in Thimphu has increased from Nu 142 per litre in 2020 to Nu 250 per litre in 2022.

Similarly, the price of dalda in Thimphu which cost Nu 80 per kg in 2020 and currently has increased to Nu 180 per kg which is increased by 125 percent. He said that he can’t imagine the prices of those items in places like Laya, Lunana, Getana and in other remote places.

He also said, “It is high time for government to interfere to control the price of fuel.”

In response to that, Economic Affairs Minister, Loknath Sharma said that the country not only facing problem with inflations, rather in some countries, they are facing with stag inflation.

Lyonpo said “The inflation is causing by the factors like demand pull, and cost push.” “Our inflation is mainly caused by external factors.”

Prime Minister, Dr Lotay Tshering said “The high inflation rate is mainly due to the inflation in the country we import from and that it is not a national issue.” He said the high inflation of a country depend on the Government of India (GoI) as country imported 85 percent of the commodities from GoI.

Meanwhile, some of the members pointed out the need to encourage buying and choosing domestic products over imported products to reduce imports.  However, some Members expressed that the formation of a committee to study the issue could provide information to devise a way forward in curbing inflation.