Easy money syndrome

EDITORIAL

A public enterprise (PE) going for high profit margins seems to be something out of this world. But, in the Nepali context, there is evidence to point to the fact that the PEs do tend to bank on increasing the profit margins, despite it being unreasonable. On this score, Nepal Oil Corporation has proved itself a trailblazer. Now, revelations have been made about the Salt Trading Corporation (STC) which earned some Rs. 1 billion by artificially increasing the price of sugar. By all norms, a profit margin of a maximum of 20 per cent on the factory gate price of goods is considered to be legal. But when that margin crosses that threshold and is raised to 42 per cent, it is against the black-marketing law of the country. And, it is claimed that this is what STC has really done. The recent artificial shortage of sugar and it being sold earlier at even Rs. 90 per kg are seen to be the discrepancies. It has been claimed by the Forum for the Protection of Consumer Rights-Nepal, that STC had purchased 50,000 metric tonnes of sugar at Rs. 55 per kg from sugar companies in the last three months, and sold that at Rs. 76 per kg, and the calculated total amount embezzled is to the tune of Rs. 1 billion. Now, if this is true, STC has acted in a most unethical and illegal manner in generating such a huge amount of profit within the last three months. Meanwhile, the regulatory body or the Department of Commerce and Supply Management is looking into the case.

The government says that it is doing everything to control corruption especially in the public enterprises, but nothing has been accomplished so far. Think of the oil corporation that does not follow any rules to maintain fiscal discipline, transparency and accountability. It just goes on raising the price of petroleum products sans any justification. The profit mongering of STC is another jolt that goes to exploit the vulnerability of the consumers even as the festive season is here. This shows how the government and the public enterprises concerned are really taking the people for a ride defying all expectations and norms. What could be envisaged in the sugar scandal is that there has to be nexus

between the STC officials and the big traders to

cash in on the situation by artificially inflating the price of the commodity. And, as it happens, the arrival of the festive season is all the more ground for the business folks to create artificial scarcity and hike the prices of every commodity. This is a time when they feel they have the right to fleece the consumers, and with the government’s inaction they are all the more encouraged.

There are laws against black-marketing, hoarding and profiteering, but they have not been implemented the way they should leading to the sense of impunity in those who exploit the consumers unreasonably. Laws alone cannot be the panacea unless they are implemented seriously and the culprits punished accordingly. However, there is reason to believe that if the government is serious enough some immediate improvement in the price structure of the essential commodities can be effected. Of course, in a free market system, the government cannot intervene, but it can act against those who go for hefty profit margins not allowed by the law.

How was that?

There is jubilation all around among cricket fans now that Nepal has made it to the World Cricket League Division III. The hard won feat was achieved because all the players played responsibly. Nepal won all the six matches they played in Malaysia. Their sterling performance deserves accolades. The Nepali team deserve this promotion for they and their coach worked hard for it. In the process, several Nepalese players scored centuries and spinner Shakti Gauchan became the most economical bowler in the tournament. Now, Nepalese can take pride in the fact that cricket has entered new heights in the country. The achievements of the Nepali squad are good for cricket in the country.

There are expectations now that the standard of cricket in the country will further improve.

Meanwhile, the Nepali cricketers will have to do even better if they are to be as good as the cricket teams from neighboring countries. Hopefully, it will not be long before Nepalese cricketing squads will also be world class.