Friday, September 14, 2012

MRP draws criticism from private sector, consumer groups

Both the private sector and consumer groups have condemned the government's initiative to set the maximum retail price (MRP) of essential consumer goods.
The government's decision on  MRP is 'against open market policy’ the umbrella organisation of the private sector said, whereas consumer rights groups have said that the MRP has been based on false price.
"The government has adopted an unethical market practice to control price hike," the FNCCI said, suggesting the government to control price hike by releasing low priced food items in the market through state enterprises.
Setting the MRP of consumer goods in an open market has raised suspicions that the government is heading towards a controlled economy.
Similarly, consumer groups have condemned the maximum retail price set by the government saying it was based on 'false price'. The government set the MRP of 15 essential food items on Thursday.
The government has taken the 'false price' to calculate MRP, said president of National Consumer Forum Premlal Maharjan. "Therefore, the decision will not be able comfort consumers," he said, adding that the government reduced the price of rice (jira masino) assuming its market price to be Rs 55 a kg while the real market price is Rs 52 per kg.
"It shows that the government is itself trapped in the black marketers' net," he said. According to him, the government has taken the prevailing higher price of most essential foods while determining the MRP. "We submitted a letter to the chief secretary today condemning the government's decision on MRP," he said.
The government has set the price of rice, wheat flour, pulses and beans under various categories. It has decided to reduce the price of edible oils by two per cent.
The MRP decision has slashed the market price of goods by Rs one to Rs 13. The government has planned to revise the MRP every fortnight.
Consumer rights activist from Forum for Protection of Consumer Rights-Nepal Jyoti Baniya echoed Maharjan. "The government accepted the proposal of the traders, so there will not be any drastic change in the market price," he said, adding that consumer groups are closely watching if the decision will be implemented.
Meanwhile, the Department of Commerce and Supply Management has started monitoring food prices according to the MRP enforced from today. "We have included MRP in our monitoring list and it will be strictly enforced," said director of the department Prem Prasad Paudel. "Traders violating the MRP provision will be punished according to law."
However, consumer activists do not believe that the department will be able to keep its promise given its unsuccessful history. The department has failed to enforce the provision of keeping a price-list, a primary requisite of Consumer Protection Act, despite four years of market monitoring. Still, over 80 per cent of grocery shops in Kathmandu have not kept a price-list.
Meanwhile, president of Nepal Retailers' Association Pavitra Bajracharya has said that the MRP will be applicable in retail shops only after one week. "We need a week to inform retail shops," he said. According to him, retailers will not be able to buy the food items on the government prescribed price in the market.

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