Consumer relief takes centre stage

The Government decision to remove the 15 per cent Value Added Tax (VAT) on diesel is bound to be warmly welcomed by the public as a timely boon which would ease the cost of living burden.

Theoretically, the removal of the VAT on diesel should from now on be reflected in reduced prices for goods and services which are diesel dependent. Needless to say, a wide variety of goods and services, including all essentials, are diesel-dependent for their manufacture and delivery and an overall, sizeable reduction in the cost of living could be looked forward to. Accordingly, while commending the Government on the VAT removal, we call on it to ensure that the relief thus provided is passed on to the consumer. We are also deeply appreciative of the fact - as pointed out by Finance Minister Dr. Sarath Amunugama - that the Government has gone in for this decision in the face of "galloping world fuel prices".

This means that the State would be incurring tremendous financial losses as a result of this move which has as its end the public good. In fact the loss thus incurred is Rs. 7 billion - something cash-strapped Lanka could ill-afford.

This move on VAT is also a commendable alternative to the UNP policy of raising fuel prices as and when fuel prices rose in the world market. Freed of erratic market forces, the prices of essential goods and services could now be expected to be relatively stable.

However, the crunch would come when the State aims at passing on relief thus provided to the consumer. Here's where State agencies would be called on to play an assertive and proactive role. This challenge, we hope, would be boldly taken-up by the State.

As has been pointed out by Science and Technology Minister Prof. Tissa Vitarana, diesel and thermal power accounts for 64 per cent of our power supply. Accordingly, the VAT removal should be reflected in reduced electricity rates for all categories of consumers. Likewise, bus and train travel should cost less. We hope a price enforcement mechanism would be in place to ensure that the harried consumers of this country come in for the envisioned cost of living relief.

State agencies, such as the Consumer Affairs Authority, need to gear-up for a more dynamic role from now on, in the economic life of the people. Spot checks on the prices of consumer goods would emerge as an urgent need.