Prices on edge : CAA, Sathosa watch living costs
The most talked about topic today is the cost of living. To
illustrate this issue we have gathered data from a wide and varied
sample. In this survey we have found many observations. The controlled
prices while helping to stabilize the cost of living has given assurance
of the maximum price a good can be sold. The government is making
efforts to bring down the cost of living and raise living standards. It
recently introduced controlled prices for 16 commodities and is taking
measures to achieve price stability in an economic environment that is
Cost of living
The effects of the price control and cost of living has a positive
relationship where stable prices will ensure inflation is under control.
The country's inflation is in a single digit at present and the price
controlling mechanism has kept it stabilised.
An artificial scarcity of goods has been created in the market,
following the government decision to impose price control for 16
essential items, many consumers complained. Some unscrupulous traders
have however increased the prices of many items even though the VAT has
not been imposed on them. Traders are also hiding stocks and thereby
they have created an artificial price increase for many essential items,
Consumer Affairs Director General A.K.D.D.D. Arandara said.
He said price control is in operation in certain mercantile
establishments but not in others. Legal action will be taken against
traders who fail to comply with the new controlled prices and for
selling goods above the controlled prices. If the Government introduces
a price, it needs to be complied with forthwith.
The Director General said, 200 Investigative Officers have been
deployed to nab errant traders. There are price control units affiliated
to each Divisional Secretariat in the country.The Director General calls
upon the consumers to complain to the authorities, instances where
essential commodities are sold over and above the control prices.The CAA
headquarters too conducts raids. The Public can make their complaints to
the Consumer Authority via the Hotline 1977 and 0766670700, Arandara
said.He said the traders who violate the control price scheme will be
strictly dealt with according to existing laws.
When a raid is carried out the entire stock of goods hidden by the
traders will be produced in courts and confiscated.The Director General
said, a shop keeper can be fined between Rs 1,000 to Rs. 10,000 and
imprisoned for six months under the Consumer Affairs Authority Act.
Where a private company is found guilty, the fine would range from Rs
10,000 to Rs. 100,000 according to the provision in the Act.The CAA
said, 1,600 raids were carried out across the country from July 15 to
August 12, while legal action is being taken against the culprits. The
benefit of the price reduction should be given to the consumers.Business
establishments who sell goods over and above gazetted prices will also
Meanwhile, Lanka Sathosa chairman Dr Rohantha Athukorala said,
consumer items are made available in all Sathosa outlets below the
It is of great help for our customers and an excellent move by the
government to reduce the cost of living. Earlier we did not have a
system to control the prices of essential items and as such the traders
sold them at exorbitant prices.
Much relief would be given to thousands of consumers in the country
under this price control system, Athukorala said.
Lanka Sathosa, particularly serves the middle and lower income groups
by selling essential food items lower than government stipulated prices.
Although the maximum retail price (MRP) of a kilo of white sugar is .Rs
95 it is available at Lanka Sathosa at Rs. 94.50.
The MRP for a kilo of red dhal is Rs. 169, imported big onions Rs. 78
and canned fish weighing 480 grams Rs. 140, but their corresponding
prices at Lanka Sathosa outlets are Rs.165, Rs.77 ,Rs. 130 respectively.
The All Island Wholesale Essential Food Traders' Association Chairman
Kumudu Nisantha said, with the Government's recent announcement of
controlled prices for 16 items, low quality gram, canned fish, big
onions, sprats and dhal unfit for consumption have come into the
market.The chairman said, as a result of this a scarcity of gram, sprats
and dhal could be experienced in the market.
Accordingly, the controlled prices of sprats imported from Thailand
and Dubai are respectively, 495 and 410 rupees per kilo. Gram, dhal, and
sprats cannot be imported and sold at the prices the Government has
fixed, said Nisantha.
Traders at Piliyandala and Boralesgamuwa claim they cannot sell the
goods under the control prices because the wholesale prices of these
goods are more than these prices.
"We have stopped the sale of sugar. The wholesale price is Rs.110.
The Government wants to sell 100 grammes of sprats for Rs.50 ,but the
wholesale price is Rs. 495 per kilo gram. So we cannot sell these goods
at the control prices. The traders said ." Our income has gone down
badly these days. The cost of living is very high, how can we survive,
the traders queried.
We haven't received any relief at all, and as such it is very
difficult to cope with the present expenses. Since our income was very
low for the last month, we are unable to pay the rent, electricity and
water bills. We have our families who should be supported, the traders
The Department of Census and Statistics complies with the Consumer
Price Index (CPI) which has two indices at present. They are the Colombo
Consumer Price Index which focus on the Metropolitan and Colombo area
and the National Consumer Price Index covering all 25 districts.
The Department of Census and Statistics acts as the official compiler
of the indices, while the Central Bank is one of the major users of the
indices. The Colombo Consumer Price Index (CCPI) has been compiled from
1952 and it is now in the third series which was replaced in 2006-7.
The National Consumer Price Index (NCPI) which is for the entire
county was from 2015 where data series started in 2014. These indices
are revised from time to time and operate on base year concept.The CCPI
is based on an average basket which represents consumer patterns. The
index is arrived at from a household income and expenditure survey
carried out in the period 2012 and 2013. The survey is generally carried
out once in three years, selecting 25,000 consumers and providing them
with a diary to note food and non-food items purchased for a week.
The relevant officials visit these households three times during the
survey to find out the food and non-food items they consume. The average
basket represents all the items listed in the survey. The Consumer Price
Index is a measure of overall price variation. Based on the price
variation the basket is selected. It is calculated from the percentage
price change from the base year and the basket is fixed for a particular
year. The reasons for change in the base year are the changes in the
economy and changes in the consumer patterns and behaviours.