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Sunday, 14 August 2016





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Government Gazette

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 constantly changing.

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 be prosecuted.

Meanwhile, Lanka Sathosa chairman Dr Rohantha Athukorala said, consumer items are made available in all Sathosa outlets below the stipulated prices.

Excellent move

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 lamented.

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.


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