"Enlightenment comes from Realizing the Unreality"
Monday, March 17, 2014
Spiralling Prices start to pinch
The following is an article I wrote for Kuensel newspaper dated 15 March 2014
From drinking black tea to cutting down on meat/cheese, belts are beginning to tighten
Inflation: When Tshittim, a security guard in one of Thimphu’s corporate offices, gets home to his old government quarter, which has broad newspapers shielding the cold wind from between the gaps on the wall, he asks his wife for a cup of hot tea and begins changing. Minutes later, his wife comes with a hot cup of tea.
Creamy, thick and sweet tea is what he loves.
Today, however, the colour of the tea has changed. It is thin and dark maroon. Phika (tea without milk) is what they have decided to settle on with the sharp rise in price of consumer items.
“Of course we buy milk, but we want to offer milk tea only during special occasions, whenever we have guests coming in,” said Tshittim.
Rapid increase in price of commodities today is hurting the wallet of people, especially those in the lower and middle-income groups.
The price of packaged everyday milk powder, for instance, has gone up to Nu 342 – Nu 62 up. While the prices of essential commodities continue to increase, income of the poor does not increase correspondingly.
Food prices tend to increase automatically when the price of fuel increases. Price of diesel has increased by more than Nu 14 a litre in just one year. Thus, when fuel price increases, transportation charges also increase. That ratchets up the price of food.
Budhiman, a corporate employee in Thimphu, said the constant increase in price of essential items, particularly food, is affecting his family in terms of nutritional intake.
“Majority of our income goes as rent and other essential expenditures like electricity bills, school fees and transportation costs,” said Budhiman.
As income does not rise with the rise in the price of things, arrangements have to be made. Budhiman, for instance, has decided to consume less meat and buy cheaper quality rice.
Nima, also a corporate employee, has starting becoming careful with the amount of cheese he uses in his favourite dish, emadatshi. “These are hard times we live in. We need to adjust to the situation. There is no way out.”
For others, however, the rise in price of essential commodities has brought some kind of discipline in their style of living. Some have cut down on smokes and drinks, among others.
“I realised I was borrowing too much money because of rise in price of things. Something had to be done about it. I didn’t know it was inflation, until it got to a state I could no longer handle,” said Karma, civil servant.
Dan Maya, who earns a minimum wage, said her salary is barely enough to pay off the debts she’s in.
“As soon as I get my salary, I have to pay. And the cycle keeps going,” she said.
Tshittim does not like the way in which salaries are revised, the way it affects poor. The salary revision doesn’t much help the poor, as it is calculated on the basic pay. He would prefer a lump sum, should there be a salary revision.
An economist said that inflation must be controlled, because it could push a number of people below the poverty line. “The government should implement policies that look at controlling inflation, because basically inflation is a tax on the poor.”
An official from the national statistics bureau said that imported inflation contributed around 53 percent to total inflation, while domestic inflation contributed 47 percent.
The government, therefore, can at least manage within that 47 percent margin, he said.