Social safety net to expand in response to Covid-19

The government is to increase the scope of various social security programmes in the budget for fiscal year 2020-21 in response to the Covid-19 pandemic, and about Tk88,000 crore has been allocated for this.

Joint Secretary (budget coordination) of the Finance Division Shirajun Noor Chowdhury told The Business Standardallocation for social security in the budget was being increased to 2.8 percent of the GDP from the usual 2.5 percent.

At present, about one-fourth of families are covered by social security. The government has announced it will double the number of beneficiaries by 2023.

Also, there are about 79 lakh beneficiaries under the social security netat present. It was learned that this number may reach around one crore in the next financial year.

In the budget for the current financial year, Tk74,367 crore has been allocated for the social security sector.

More than three crore people of the country are already living below the poverty line. According to various surveys by private organisations, the impact of the novel coronavirus on the economy and trade could push another threecrore people below the poverty line.

Shirajunsaid the novel coronavirus has caused a devastating effect on the income of the poor.

"More poor people are being brought under the social security net at this time. Additional allocations will also be made for the old-age allowance, widow's allowance and interest-free microcredit distribution by the social welfare department for poverty alleviation. There are preparations to distribute rice among the poor at the rate of Tk10 per kilogramme for seven to eight months," he said.

A Finance Division official involved in budget formulation said, "The government has allocated Tk5,000 crore of its own funds for the salaries of export sector workers at just two percent interest. The fund tenure is coming to an end in June. Although there is a fear of layoffs in the overall industrial and service sectors from next July in addition to the export sector, no special allocation is being made in this regard."

Additional Secretary (budget, activities and evaluation) to the social welfare ministry Mohammad Ismail told The Business Standard 76,45,000 people are receiving an old-age allowance, widow's allowance or disability allowance. "A total 16.25 lakh new beneficiaries will be added in the next financial year. The amount of everyone's allowance will remain unchanged. In the next budget, the allocation has been increased by Tk1044.50crore to reach Tk6,096 crore."

He said the social welfare ministry distributes interest-free microcredit to alleviate poverty through four programmes.

"Interest-free loans ranging from Tk5,000 to Tk30,000 per family are given to the very poor. The allocation for this sector in the next financial year will increase. In the current financial year, the allocation is Tk64.50 crore."

According to finance ministry officials, the honorarium of the freedom fighters has been increased from Tk10,000 to Tk12,000 per month in the current financial year. This will remain unchanged in the next financial year. However, as 1,256 new freedom fighters have been added to the list, the allocation for their honorarium is being increased.

In the current financial year, about 11.50 lakh people – including working lactating mothers, poor mothers, tea workers, plus members of the third gender and Bede communities – are eligible for social security. This number may increase to 13 lakh in the next financial year, said finance ministry officials.

Former finance adviser Dr AB Mirza Azizul Islam told The Business Standard many people living above the poverty line have become poor due to the novel coronavirus. "They need to be pulled above the poverty line by increasing the coverage of social security. Money should be spent on social security instead of financing projects that are not a priority."