Social safety net to get wider and better

The government is going to increase the number of beneficiaries under its social safety net programmes by around four lakh in order to extend support to more poor people struggling to make ends meet amid lingering inflationary pressures.

The decision to include new beneficiaries came following a cabinet committee meeting on social safety net programmes last week. However, the allowance of the schemes will remain unchanged.

The finance ministry issued two circulars earlier this month to bring all safety net programmes under a new structure in order to reduce leakage, misuse, and corruption.

A top official of the ministry said the government would increase the number of beneficiaries in two major schemes – the old age allowance and the allowance for widows, deserted, or destitute women.

He added that the allowances could not be hiked due to fund constraints.

The increase in the number of beneficiaries will provide relief to those in need, especially considering the persisting cost-of-living crisis. In Bangladesh, the inflation rate has hovered above 9 percent for the last 13 months.

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Our social safety net budget is neither equitable nor efficient

Around 58.01 lakh elderly people are getting Tk 600 per month in the ongoing fiscal year. Their number will increase by two lakh in 2024-25.

For the current fiscal year, the government has allocated Tk 4,205 crore for the 'Old Age Allowance' programme. Men above the age of 65 and women aged more than 62 with an average annual income of less than Tk 10,000 are eligible.

All eligible elder citizens are getting the benefit in 262 upazilas. If the number of beneficiaries is increased by 8 lakh, it will be possible to bring all eligible individuals under the scheme in the remaining 233 upazilas, according to the finance ministry.

At the meeting, finance ministry officials said the number of beneficiaries needs to be increased gradually.

The government has allocated Tk 1,711 crore for the Widow, Deserted, or Destitute Women programme in 2023-24.

Around 25.75 lakh women are already beneficiaries of the scheme, which will accommodate a further two lakh.

Under the programme, such women aged 18 and above and with an annual average income below Tk 12,000, are getting allowances of Tk 550 per month.

However, the allowance has been increased for some other schemes.

Under the Mother and Child Benefit Programme, the allowance is going to be raised from Tk 800 to Tk 1,000. Also, senior citizens aged 80 and above will get allowances of Tk 900 per month from FY25 compared to Tk 600 presently.

Under the financial support programme for cancer, kidney and liver cirrhosis patients, 30,000 beneficiaries are being given a one-off payment of Tk 50,000 this fiscal year. The number of beneficiaries will go up to 50,000 next fiscal year.

The Ministry of Liberation War Affairs recommended raising the allowance for freedom fighters by Tk 10,000 to Tk 30,000. However, the committee has not taken any decision to this effect.

At present, two lakh freedom fighters enjoy an allowance of Tk 20,000 monthly.

The government set aside Tk 43,389 crore for 1.39 crore beneficiaries under its 10 core social safety net programmes. Of them, 8 lakh retired government employees will get Tk 27,413 crore.

Allowances through MFS linked to national ID cards

In a circular issued earlier this month, the ministry said all funds for the social safety net programmes must be provided through mobile financial services that are registered using the national ID card of the beneficiary. This must be ensured by June 30 of 2025.

At present, allowances for many programmes are disbursed through MFS, but they are often not registered using the beneficiaries' national identity cards. So, it is sometimes misused.

If a beneficiary can't provide fingerprints or does not have a national ID card, the rule may be relaxed for them.

Comprehensive report on safety net programmes

The finance ministry prepares a detailed report of social safety net programmes each year. This year, it is going to include some new issues in order to get a clearer picture of who the beneficiaries are and which regions are being benefited most.

The government provides safety net benefits under around 130 programmes and the total allocation is Tk 126,000 crore for FY24.

Analysts question whether some of the programmes are truly benefitting poor people. They also say a huge amount is being wasted, pointing to allegations of corruption in distribution channels.

Therefore, the finance ministry has ordered all ministries concerned to submit reports detailing who is receiving allowances and the goals of the programme by April 30.

Based on the reports, the finance ministry will prepare a comprehensive report as per the recommendations of the World Bank and the International Monetary Fund.