"The rate of inflation is increasing in a manner that hits poor, working and ordinary people very hard. These people lose their capacity to buy the essentials they need," Khan told a roundtable on 'Price spiral and the budget for 2007-08: Thoughts of marginal people' in Dhaka yesterday.

He said initiatives such as the vulnerable group feeding and the vulnerable group development programmes are needed to be expanded to counter the pressure the poor now find themselves under.

Shamunnay and Manusher Jhonno Foundation, two non-governmental organisations, jointly organised the roundtable at the CIRDAP auditorium.

Sohel Ahmed Chowdhury, former commerce secretary, Khondoker Ibrahim Khaled, former deputy governor, Bangladesh Bank, Shykh Seraj, director news, Channel i and Impress Tele film, and Kazi Farooq, general secretary, Consumers Association of Bangladesh spoke on the occasion.

Pointing to the fact that the country experienced no significant growth in the farming sector in the last five years, the former finance adviser blamed the economy's structural problems for this situation resulted from rising inflation rate.

Bangladesh needs to invest in the agricultural sector in a planned manner to revive growth in the sector and contain the current price spiral, Akbar Ali Khan said.

The government should introduce some instruments by which it can intervene in the market to contain inflation and prices of essentials, he suggested.

The country has no law and active administrative order to check any illegal market syndication, however he also said that essential commodity prices had increased worldwide due to reductions in agricultural subsidies and increases in oil and transport costs.

Presenting his keynote speech, Atiur Rahman, chairman, Shamunnay, said policy makers in previous years did not consider any measure against business people who created illegal syndication.

He said syndication was one of the main reasons for the price spiral but policy makers only relied upon a contractionary monetary policy to contain inflation.

He strongly advocated raising farm sector investment through providing direct cash subsidies, quality seeds and fertiliser for the farmers and transferring technology to them.

He also stressed the need for an effective Trading Corporation of Bangladesh (TCB) and the reinforcement of market monitoring to contain the price spiral.

Sohel ahmed Cjowdhury said the government may build up a public-private partnership basis organisation to operate trading of essential commodities.

He urged the government to immediately introduce four more wholesale markets in the capital to restore discipline in the retail market.