Workers of 14 sectors cannot afford essential foods: CPD study

The surging inflation has left workers in 14 sectors in the capital, including restaurants, cosmetics, tailoring, cotton textile, bakery, etc, to survive without essential foods due to low wages, a study has found.

It costs a four-member household more than Tk8,000 to afford 16 essential food items for a month, whereas workers in many sectors in Dhaka earn a lot less, according to the study by the non-profit organisation Centre for Policy Dialogue. 

If fish and meat are taken into account, a household of four needs to spend Tk21,358 on food a month, which no labour can possibly earn, said the study.

The report was published on Sunday during a press conference on the dynamics of Bangladesh's economy.

Researchers on the occasion said commodity price hikes have made it almost impossible for the poor, low-income and lower-middle-class people to live an affordable life.

The report claimed although the prices of some products in the market have gone up by 30-40%, the data from the Bureau of Statistics show that the rate of inflation is very low.

The government is not taking proper measures to fight inflation as true data on the issue is not being published, said the report.

Delivering the keynote address at the conference, CPD Executive Director Fahmida Khatun said it costs over Tk29,000 to cover food and other services while renting a one-room apartment in Dhaka metropolis.

Professor Mustafizur Rahman, distinguished fellow at CPD, said commodity prices are increasing in the local market following price hikes across the globe.

He said if the supply of food and commodities at subsidised prices could be substantially increased, it would bring down the prices in the market.

He also urged an increase in the minimum wage for all sectors.

CPD's Research Director Khandaker Golam Moazzem said, "The import of rice has increased by 60,000 tonnes this year compared to the previous financial year. Rice stocks have increased considerably as well to 12 lakh metric tonnes."

Taking this into account, the market situation reflects mismanagement, he said.

Meanwhile, presenting the keynote paper, Fahmida Khatun said economic, political, and international problems have created massive challenges for the country's macro-economy, including inflationary pressures, foreign trade deficits, current account deficits, exchange rate volatility, and pressure on foreign reserves.

She said the revenue collection saw an increase in the first six months of the current fiscal. However, in the current situation, the net revenue collection would be at least Tk30,000 crore less than the target set for the fiscal.

She also said the government's spending capacity in key sectors including health, education and ICT has been declining while enough money was not being spent on social security to cope with the pressure of inflation despite having the capacity.

Meanwhile, claiming there is a big discrepancy in the government provided inflation data, Fahmida said the Bureau of Statistics was still compiling inflation reports based on data from 2005.

She said, at that time a large part of the people's total income was spent on food. But that has changed over time due to a rise in income and expenditure on new products and services has increased.

The effect of all these things has not been added to the government data. Hence, commodity prices have gone up in the market but according to the government data, inflation is not going up.

Fahmida said the actual income and purchasing power of the workers in public and some private sectors have decreased as their salary is not increasing proportionally to the true inflation rate.

Recommendations:

The CPD has recommended giving top priority to controlling inflation and protecting the poor from the effects of inflation in the next financial year.

Inflationary pressure will hamper a sustainable and inclusive pandemic recovery, since the real purchasing power of many people will decline, causing further inequality, Fahmida said.

She also recommended controlling prices by reducing import tax on essential commodities. Noting that indirect tax has become one of the main sources of revenue in the country, Fahmida said if such taxes are abolished and importance is given directly, income inequality will also come down.

She further recommended increasing surveillance to curb anti-competitive elements like black markets, stockpiling and syndicates to ensure the supply of essential commodities in the market.

She also suggested a base year update to get real inflation information.