Three types of measures can be taken in the budget to control inflation
Three types of measures can be taken in the budget to control inflation. These include improving supply management, reducing demand and taking steps to address the livelihoods of the poor. And the best way to deal with the dollar crisis is to leave it to the market, which the central bank has already done.
First of all, let’s talk about what should be done in supply management. Inflation has already risen due to the rise in prices of various products in the international market. Care should be taken to ensure that the supply of goods in the market is not disrupted. One of the major import products of the country is fertilizer, diesel, LNG, wheat, edible oil. These are almost 100% import dependent products. Most of these are imported by government agencies such as fertilizer, diesel and LNG. For this the government allocates in the budget. It also keeps subsidy allocations. But due to bureaucratic complications, the concerned agencies are often unable to release funds from the Ministry of Finance on time. Care must be taken to ensure that imports do not get stuck due to lack of funding. If imports decrease, production will be disrupted.
Again, the companies can take initiative to adjust the prices of fertilizers and diesel in line with the international market without having to rely on government funding. If the prices of these products increase in the international market, the prices will also increase in the local market. However, there is a risk of rising prices of various commodities including electricity and agricultural products, which could provoke inflation. There is a kind of tension in supply management as a whole. With this, the situation of the government is like a dilemma. Steps should be taken to balance the two.