Price controls are not a solution during a pandemic

Dhananath Fernando, Cheif Operating Officer of the Advocata Institute joined a discussion on the economic impacts of Covid-19 on Sri Lanka with Faraz Shauketaly on NEWSLINE.

“91% of our Tin Fish is imported and the rate of tax (tariff) is 35% on one hand, and then you ask them to sell it at Rs. 100 which is almost about half of the general retail price according to the Government Census. So, the poor man, who could have afforded a Rs. 200 Tin Fish can no longer find it available in the market and now his protein requirement he has to move to an alternative which is more expensive than Rs. 220 (the original price of tin fish)”

“The general rule is that when you have price controls, it is unavoidable that people hide stocks and it hits the poor the most – when there is no food available at the shelf and you have to shift to the alternative that is more expensive.”