The National Assembly (NA) rejected the motions to establish a committee on increasing the price of goods and services proposed by the Opposition members on June 24.
The government, rejecting the motion, asked whether the MPs who are not in favour of the proposal could come up with a new committee.
Kengkhar Weringla MP Rinzin Jamtsho suggested need to establish a special or a multi-sectoral joint committee to carry out an in-depth study and present the report to the House.
Currently, the country’s inflation rate is “reportedly” at 7 percent.
Submitting the motion, Rinzin Jamtsho said that imports has been increasing which has lead to negatively impacted the trade situation, increasingly challenged the growth of domestic industries and depletion of the foreign currency reserve.
He said that the situation has been aggravated by the Covid-19 pandemic and inflation has been flying off the roof.
“The government is responsible for monitoring, controlling and regulating the inflation rate,” the MP said.
The MP said that the situation is affecting the poor.
MP also said that now edible oil costs Nu 1,250, about 125 percent increase in Thimphu.
Tengye Lyonpo Loknath Sharma said that there are three factors—demand-pull, cost-push, and built-in with the internal and external inflation. “Our inflation is an external factor.”
Lyonpo said that the government already has a multi-sectoral committee for fuel which is monitoring the fuel prices.
Agrigulture minister Yeshey Penjor said that if people can reduce the import by substituting with locally produced goods, the inflation could be reduced.
Bartsham Songphu MP Passang Dorji said that there is injected inflation and imported inflation.
He said that if the inflation rises there, is stagflation. In the stagflation, there will be no employment opportunities and no economic growth.
“If the motion passes, we will know where our economy is and what essential items can be imported and what else we can export,” MP said.
The value of Nu 100 in 1991 is Nu 1,359 today.
Prime Minister Dr Lotay Tshering said that despite the difficult situation, the government has maintained inflation below 7 percent.
In FY 2011-12, the inflation was 9.6 percent.
Lyonchhen said that the government has a committee chaired by the secretary of the ministry of economic affairs.
“If members feel that the committee is not competent to perform the duty, they can appoint another committee,” Lyonchhen said.
Finance Minister Namgay Tshering said that the rising cost of import has increased due to external factors: “The dollar rate has increased so high and there is a widening current account deficit.”
Opposition Leader Dorji Wangdi said that the petrol price has increased by 38 percent and diesel by 60 percent, which has led to rise in consumable items by 37 percent.
“It will affect the low and middle-income group, since more than 80 percent are under this category,” Dorji Wangdi said.
He said that the per capita income has decreased over four years. “In 2017, per capita income was US$ 3,400 and last year came to US$ 3,100.”