Safety net expands but who gets the most of it?
A large part of the safety net money will be spent on old age, widow, disabled and destitute allowances
This year's budget was a business as usual affair, as if Covid is a transient thing. As things proved fatally wrong, it was hoped the next year's budget would directly target the new poor through a spurt in cash transfer and prop up consumption.
In his budget speech Finance Minister AHM Mustafa Kamal also recognised this reality when he said "strong domestic demand will be the main source of our growth. Our focus will be on increasing consumption and investment".
However, when one takes a long look at the budget documents, the picture that emerges is it was long on investment through tax cuts and other benefits but short on revamping consumption through increased cash transfer.
Keep updated, follow The Business Standard's Google news channel
The voices of the Covid-hit poor are drowned by the euphoria of dishing out perks to the entrepreneurs (which by all measures was a right step).
And so in the end it seems the 6.2% deficit in budget is a result of entrepreneurs getting benefits for all the right causes but not caused by the need of the poor even if one considers the proposed social safety net programme for the next year expanded by 13%, or Tk12,000 crore, to include about 14 lakh new people.
And so the question of what will happen to the 2.5 crore new poor remains, as nothing has been mentioned about them. We have read of a lot of strategies in the budget speech but not specific actions which have been enveloped in various existing programmes.
An exploded view of the safety net allocation shows a quarter of the allocations alone goes to pay pension to 7.5 lakh government employees while 1.12 crore old people, widows, financially insolvent and disabled people get only 7.2%.
Interest payment on Sanchay Patra, of which the rich and the middle class are the main buyers totalling 61 lakh people, loan interest subsidy for SMEs and microcredit got about 10% of the social safety pie.
Some additional 8 lakh old people, 4.25 lakh widows and destitute women and 2.02 lakh disabled persons will be included in the existing social safety net programme. They will receive between Tk500 and Tk750 a month, depending on which category they fit under.
Currently, some 98 lakh people receive these allowances.
Allowances for about 2 lakh freedom fighters, who are also part of the safety net programme recipients, has significantly increased from Tk12,000 to Tk20,000 a person, for which about Tk2,000 crore will be required additionally.
