In Communist countries government controls prices and in Capitalist countries competition in Private Sector does that. India’s Mixed Economy has both Public Sector Undertakings (PSUs) and Private sector. Most of the PSUs are ill maintained and incur losses. Private sector gets subsidies and in ‘license raj’ had monopoly too. Even in Market Economy there are industrial or trader syndicates to keep prices high to exploit public. Government can control this artificial price rise through competition from PSUs. In our Democratic set up controlling prices will be possible by strengthening PSUs but successive governments have been moving in reverse gear.
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Difference between the price of generic and non generic medicine is about 65%. In other words non generic medicine is allowed to have 65% additional profit over generic medicine! Who is permitting this exploitation?!
Government buys for ‘Minimum Support Price’ (MSP) from farmers and allows business people to sell for ‘Maximum Retail Price’ (MRP). Both ways public loses. This is not just hypocrisy but gross injustice.
On the lines of Comptroller and Auditor General of India (CAG) who verifies expenditure of public money, a similar independent constitutional body with some experts is necessary to permit spending of public money. Though Finance department (headed by a politician) is there, it is well known that politics are influencing even top financial institutions. These days when Executive is subjugated to Legislators there is a need for control by an independent body of experts to review, permit government borrowing, spending, raising of taxes, consumer charges, prices of edible oil and other items. Any violation of its dictates should be punishable by law.
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I think till date there is no law in India on fixing prices except MRP which is too very liberal. Otherwise how can there be huge ‘discounts’ and ‘buy one, get one’ offers. PSUs like LIC, banks give lots of money to industries under the influence of Finance department jeopardizing public money. So it is necessary to establish an institution with experts to control this menace of unproductive expenditure and non performing assets (NPAs). Further the pay and allowances, foreign trips, multiple pensions of the legislators too may be decided by this body which controls expenditure of public money. It is wiser to evaluate and prioritize spending money than finding the misspent money by auditing it later (though that is also necessary).
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