No new allocation for poor in FY22 budget

In the upcoming budget, there is no new allocation for the large number of people who have been unemployed and falling below the poverty line due to the impact of Covid-19.

However, similar to the current fiscal year, the government will provide cash assistance to those listed in various sectors if the Covid-19 outbreak intensifies.

Finance ministry officials said that the budget includes an additional allocation of about one lakh tonnes of rice-wheat to be distributed through OMS and food-friendly programmes in the open market for the poor, but the subsidy in this sector is being reduced by about Tk400 crore with the hope that the price of rice would be tolerable as a result of the bumper yield of Boro this year.

Officials involved in budgeting said that the government has no information on the impact of Covid-19 on any segment of the population. No study has been done so far on the impact of incentive packages worth Tk1.25 lakh crore announced by the government.

As there is no specific information about the victims, it is not possible to identify them and reintegrate them under the social security net. So it is not possible to allocate in the budget for the unemployed or the newly impoverished ones, ministry officials said.

They also informed that the Ministry of Finance has no plan to conduct a study on the economy and its impact on people of different walks of life until the Covid-19 situation is brought under control. However, the finance ministry will survey to assess the impact of post-budget incentive packages through third parties.

According to the ministry officials, a fund of Tk10,000 crore is being set up in the next financial year to deal with the Covid-19 situation and cash assistance will be given to the victims in various sectors if necessary. However, the government will ensure food security for the poor by selling rice and wheat at OMS at Tk30 per kg throughout the year.

They also said that Tk16,727 crore will be allocated for foodgrain procurement in FY22, which will be spent on food grain imports, internal procurement and subsidies in OMS. The allocation for the current financial year was Tk16,453 crore.

A target of 33 lakh tonnes of food grain – 26 lakh tonnes of rice and six lakh tonnes of wheat – has been set for the next financial year to build a food safety net in the country.

To keep the price of foodgrain stable in the country, about 15 lakh tonnes of food grains will be allotted for good friendly programmes such as OMS, Kajer Binimoye Khaddo, VGF, test relief, etc.

In the next financial year, Tk302 crore will be allocated for the import of food grains through foreign loans. Besides, food will be imported from its funding of Tk3,793 crore. Expenditure on procurement of paddy and rice has been estimated at Tk8,216 crore internally.

The government buys food grains at higher prices and sells them to the poor in the open market at lower prices, and the loss is calculated as a subsidy. To meet this subsidy, an allocation of Tk4,416 crore is being made in the next financial year. In the current fiscal year, it was Tk4,817 crore.

Sources said that the price of rice in the international market will be lower in the next financial year. So, the amount of subsidy will be reduced.

In the budget of the new financial year, all elders and widows of 150 upazilas will be given an allowance of Tk500 per month under the social security fence. Besides, four lakh newly disabled people are being brought under the allowance. People with disabilities get an allowance at the rate of Tk750 per month.

According to the finance ministry, 49 lakh people are receiving old age allowance, 20.5 lakh widow allowance and 18 lakh people are receiving indigent disability allowance at present.

The monthly allowance of freedom fighters is being increased from Tk12,000 to Tk20,000. About two lakh freedom fighters are getting this allowance in the current financial year.