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Government Setting Prices: The Worst Thing To Do
By KTM Metro Reporter
September 14, 2012: according to the Nepalese media reports, the Government of Nepal has set the prices of basic food items that common folks consume daily. Setting prices of any commodity other than the state monopoly commodities such as fossil fuels and electricity is the worst thing the government could do.
Setting prices of any commodity is the job of the market. Prices of commodities vary depending on various factors such as supply and demand, quality of commodities, and the people’s liking of commodities, and production of commodities.
The government could do the best of all is to monitor the prices, whether the suppliers are forming a cartel to set the monopolistic prices, whether they are adulterating the commodities, and whether they are causing artificial short supply of commodities.
Currently, the transporters have set up a cartel causing high prices of transporting commodities. So, the government needs to break up such a cartel immediately so that anybody could compete in transportation.
The most important job of the government is to set the people in competition with each other in doing business and making the market the most competitive rather than making it a close market where only a group of supplies play a role.
The other most important thing the government needs to do is to expedite the security checks of trucks at each checkpoint. Sometimes, trucks carrying goods need to stand hour before getting through a security check. In addition, the police tend to harass drivers for extracting few rupees from the drivers.
