Consumers Living In The Red

Government Statistics Reveal All

By Mandana Ismail Abeywickrema

Burdened by the constantly increasing Cost Of Living (COL), the purchasing power of consumers has seen a steady decline during the past few years. In fact, a majority of the families in Sri Lanka currently live in the red, to the tune of Rs. 22,000 per month.
Government statistics have revealed that on average, the monthly income of a family does not commensurate the expenditure, given the constant increase in the “market basket.”
The prices of vegetables, milk powder, wheat flour and flour-based products have increased during the past few weeks.
A packet of 400g milk powder pack by Rs. 19 and a one kilo pack by Rs. 48 last month.
Wheat flour prices increased by Rs.10.50 a kilo and a kilo increased from Rs. 63 to Rs. 73.50 per kilo.
The vegetable prices have been on an increase since last month and its impact on the people’s purchasing power could be witnessed when walking into a vegetable stall in the city. All prices marked are for 250g, which is now considered the amount a family could afford.
The Census and Statistics Department (CSD) has said that the market basket has increased by Rs. 577.76 between the months of April and May this year. The Colombo Consumer Price Index (CCPI), which is the country’s official price index, used to monitor the change of price movement, which was recorded in April at 212.6 index points, had increased to 215.9 in May this year.
The CCPI for last month stands at an even higher 217.7, which means the value of the market basket is Rs. 39,186 (each index point is valued at Rs. 180, therefore the value for the month of June being 217.7×180).
The market basket valued at Rs. 25,344 in 2006 has steadily increased to Rs. 39,186 by June 2010.
However, at a time when the COL per month is calculated at Rs. 39,186, the minimum basic salary of a public sector employee is Rs. 11,730, a private sector employee is Rs. 5,750 and an estate sector worker Rs. 290 per day.
The addition of allowances amounting to Rs. 5,250 has made the minimum wage of a public sector employee Rs. 16,980.
Hence, a large number of the working masses earn a monthly salary that is far below the estimated cost of living by the government. The COL estimated at Rs. 39,186 indicates that a public servant who earns Rs. 16,980 per month would be on the red to the tune of Rs. 22,206 per month.
The CSD posting in its website, said that the median monthly income of Sri Lankan household stands at Rs. 16,735 while the average monthly expenditure of a household is Rs. 22,952.
It is in this backdrop that the opposition has accused the government of failing to provide any relief to the people in its 2010 Budget.
JVP politburo member and National Trade Union Centre Head K.D. Lalkantha said that government statistics alone is an admission of the difficulties faced by the people.
He told The Sunday Leader that the cost of living increase and the non-payment of a decent salary to workers in the public, private and estate sectors has had a drastic impact on people’s purchasing power.
He explained that the final page of the Central Bank’s 2009 annual report has said that the median income of a Sri Lankan family per month in 2009 was Rs. 17,109.
“This amount is far less than the value of the COL. In 2009, the median income of a family in the Western Province was Rs. 25,602 per month while the “poorest” region, the Uva Province recorded a median monthly income of Rs. 11,178,” he said.
Lalkantha added that people have been forced to cut down on their monthly expenditure and in some instances families have been compelled to slash their monthly budget for health services.
The working masses have not received a decent salary in line with the COL in the past few years, he said.