Instability in domestic markets


If the inflation index for December 2022 is considered, it emerges that the “experienced finance minister” named Ishaq Dar’ has been unable to keep prices under control. The coalition government has shown no muscle in protecting commoners’ financial well-being, and as a result, they have largely been left on their own as the country faces a harsh and painful price hike as a result of years of shortsighted and self-serving actions. In December, consumer inflation in Pakistan reached 24.5 percent, up from a slightly lower 23.8 per cent in November. The data brings the average inflation rate for the first six months of the current fiscal year to above 25 per cent.
According to the data, food has the highest price tag in terms of inflation, with prices rising by 35.5 per cent year on year. Prices for perishable goods have risen by an astounding 56 per cent on average over the same month last year. The situation merits the government’s intervention to some extent to deal with stockpiling, monopolies, permanent rising prices, and temporary price increases. One of the basic roles of the government is to provide basic-need items to the public at established prices. To assist all people, the duty must be carried out throughout all markets.
There must be regulation and oversight of the open market participants to prevent fictitious inflation. In developing nations, a free market economy cannot survive on its own. A combination of a market economy and a centrally planned economy is required. The government has floated concepts such as utility stores, model bazaars, and sassta bazaars with this aim. Not very impressive. Economists all across the world advise governments against establishing utility stores and subsidy-driven bazaars in the free market era since it goes against the essence of a capitalist government’s function in company management.
These actions skew the market, producing stockpiles or imbalances. Furthermore, utility stores and model bazaars serve metropolitan areas, whereas rural inflation is always on the rise. Furthermore, corruption and a lack of transparency will keep them from reaching their goals.
In such testing times, the government should show resolve to ensure that opportunistic parties do not profit from the prevailing instability in domestic markets. Other than administrative control, the government may experiment with ration cards to help specific groups of people. While providing relief to people, the government can learn from the Indian model of a targeted public distribution system to address the challenge of poverty reduction. By taking these steps, the government has relegated its principal function to organizing bazaars.