10/04/2012, 00.00
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Kathmandu, an open war between the government and entrepreneurs on controlled prices

by Kalpit Parajuli
The government has recently established a rule governing the maximum retail price for 15 staples. These include rice, sugar and food grains. The aim is to combat speculation. For businesses it is a rule that restricts freedoms, choking the market. For the Chamber of Commerce and Industry is a "poison" that kills the economy.

Kathmandu (AsiaNews) - It's open war between the business community and the government, after the decision taken by the government in recent days to set a regulated price for 15 essential items including rice, cooking oil, sugar, salt and food grains. With the law governing the maximum retail price (MRP), Kathmandu has lowered by an amount ranging from 5 to 15 rupees, the cost of some basic foods. For the the local Federation of Nepalese Chambers of Commerce and Industries (FNCCI), it is a rule which means to "control the market" and will eventually strangle the economy and businesses. Members of the government respond that it is a necessary measure to prevent speculation, especially on the eve of the Hindu festival of Dashin scheduled in 15 days.

Bhaskarraj Karnikar, vice-president of FNCCI, denounced "the policy of state control" imposed by the government, which is a "slow poison" against "an open and liberal economy". His sentiments were echoed by Bhaskarraj Karnikar, president of small and medium-sized retailers association, who warned: "we cannot sell the products at a price set by the government, otherwise we will be selling at a loss." The businesswoman added: "If there is a full implementation of the maximum retail price, thousands of retailers will be forced to close."

For the first time since the birth of the modern Republic of Nepal in May 2008, the government has passed a measure that directly intervenes in the market by setting a ceiling on the prices of goods (necessities). Kathmandu states that it these are not forms of "controlling" the market, but rather of "regulating it" for the good of the citizens.

Rajkishor Yadav, a government spokesman, explained that the law was made after "the business community has created a totally artificial crisis," which led to "a surge in prices in the articles of daily use." He stresses that there is no will to control the market and adds: "In the first phase we fixed a cieling for the cost of 15 basic necessities, but the measure will be extended soon to other articles, after a careful analysis of the impact" of the norm on the economy and the citizens.



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