Nepal | July 16, 2020

Black market flourishes as state mechanism ceases to function

Himalayan News Service
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Kathmandu, January 21

Prices of consumer goods in the domestic market have skyrocketed since the imposition of blockade on Nepal-India border points because of the government’s inefficacy in managing the supply situation and failure to take stringent action against those engaged in black-marketing, a snap survey conducted by the Society of Economic Journalists, Nepal (SEJON) says.

Prices of some of the goods have surged by over 500 per cent since the crisis hit the country on September 24.

Price of sunflower cooking oil, for instance, has surged by 150 per cent to Rs 300 per litre, while price of Basmati rice has gone up by 22.22 per cent to Rs 110 per kg. Clay heater, on the other hand, now costs Rs 1,500, up 500 per cent than in the period prior to the crisis, whereas wood, which used to be sold for Rs 15 per kg, now costs Rs 60 per kg.

Similarly, prices of construction materials, such as cement, bricks, galvanised corrugated sheets, crushed stones and sand, have gone up in the range of 33.33 per cent to 100 per cent, while restaurant menu has soared by 33 per cent to 66 per cent.

Worse, prices of petrol, diesel and cooking gas have skyrocketed by up to 573 per cent, says the report of the survey, conducted in various places in Kathmandu Valley.

“Allowing the prices to go up by over five times effectively means the state mechanism has ceased to function,” adds the report of the survey, which compared prices of September 24 to December 30 with those of the period before the crisis.

It has long been said hoarding of various essentials and a vibrant black market are driving up prices of various goods in the market. In this regard, Metropolitan Police Range Kathmandu has arrested 133 people engaged in black-marketing.

“But the concerned authorities are taking time to take stringent action against those found guilty, although there are enough laws to penalise them,” says the report.

Also, the government’s market monitoring has remained ineffective and an adequate number of market monitoring teams has not been mobilised to cover all the areas, adds the report. “In addition, concerned agencies have even failed to act upon complaints filed by consumers.”

What is even more deplorable is that the government has failed to come up with a concrete plan to smoothen or normalise supplies of various goods, says the report.

All this has hit the low-income and lower-middle income groups hard, as they have limited income and cannot always afford to buy essentials whose prices have inflated beyond means.

A version of this article appears in print on January 22, 2016 of The Himalayan Times.

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