Govt to combat C-O-L with free market policy

by Gamini Warushamana

The government will not go for price control to curb the rising cost of living, Secretary to the Ministry of Trade Dr. R. M. K. Ratnayake assured. The government strongly believes that the free market would bring the price level to the minimum equilibrium, he said in response to some media reports that the government will introduce price control for essential goods. However, the government has decided to take firm action against the price manipulation of some items.

Cement prices are increasing rapidly despite the large tax reduction for cement imported from India. Under the Indo - Sri Lanka FTA, 35% duty on cement imports was removed. But the price of Indian cement did not reduce and is sold at the same price. As a result the government loses revenue while importers earn supernormal profits.

Finally neither the benefit is passed on to the consumer nor it impacts on the cement prices in the market as expected, Dr. Ratnayake said.

Dr. Ratnayake said the government was considering all possible measures to control the rising cost of living under free market policies.

"We will not reverse the policies. The budget shop is one attempt to reduce prices of essential goods. The objective is to provide consumer goods at wholesale prices and arrest the price manipulation carried out by the traders", he said.