March 7: Industrialists and businessmen have said that the government should take responsibility for the recent hike in prices of consumer goods in the domestic market due to the outbreak of war between Ukraine and Russia. They expressed such view after the government alleged that the price hike was due to the black marketing by the industrialists

They denounced the government’s allegation and said that such claim made by the government was aimed at tarnishing the image of the industrialists.

Prices of consumer goods and petroleum products are constantly on the rise in the international market.  Pawan Sharda, the former president of the Morang Merchants’ Association and member of the Constituent Assembly said that the government should provide relief to the consumers by reducing customs and VAT. He warned that if this situation continues, consumers won’t be able to make purchases of goods.

He said that the industries have less than 25 percent stock of goods due to the monetary policy and there may be shortage of food items in the near future. Sharada said “The stocks of industrialists and businessmen have dropped to less than 25 per cent as the banks refused to give out loans.” Sharda also said that the rise in prices of unrefined mustard oil, soybean oil and sunflower oil coming from Ukraine will finally hit the Nepali market after two months.

 “First of all, the government must take proper care that the public is not hit by inflation. The people will not be able to survive if the main objective of the government is to earn revenue. The prices will be stable only if a 50 percent discount is given in VAT and customs.”

The Morang Merchants’ Association has urged the government to take responsiblity for inflation and take decisions in the interest of consumers. Naveen Rijal, president of the Morang Merchants’ Association said, “It is the responsibility of the government to control inflation. We have no role in it.” He added that the raw materials of imported goods and finished goods come at an increased rate from third countries itself. The government needs to pay attention in order to control the price of such goods.

According to the industrialists, the Indian government has reduced tariffs four times after the rise in price of oil in the international market. However, the government of Nepal does not care about reducing customs duty or VAT. Rijal said that the government is looking for an escape from its duties and responsibilities by accusing the traders of increasing the prices.

Mahesh Jaju, advisor to the Confederation of Nepalese Industries and former president of the Morang Merchants’ Association said that they did not engage in black marketing, hoarding or did not raise market prices and clarified that the increase in prices was solely due to the outbreak of war between Russia and Ukraine.

Jaju put forth his opinion that the criteria for loans and interest rates should be different for the industries producing luxury goods and daily necessities. He said that the return from industries is not more than 10 percent but interest from bank deposits is 11 percent. In such a situation, he said he doesn’t understand whether the government wants to promote industries or wants people to deposit their money in banks.

Prakash Mundada, former president of the Morang Merchants’ Association and senior vice president of the Confederation of Nepalese Industries, accused the Nepal Rastra Bank of pursuing a policy of investing only in areas that increase GDP and has disturbed the market by giving 11 percent interest rate to the institutional depositors and restricting the industrialists from bringing goods on loan. Mundada said that the government has tied the hands of industrialists by restricting the import of goods.