Social protection schemes’expansion falls short of needs

The social safety net programmes (SSNPs) for the next fiscal year have largely focused on expanding the coverage of the existing schemes amid calls to make them better targeted, increase allocation and include the new poor amid the raging coronavirus pandemic.

On Thursday, Finance Minister AHM Mustafa Kamal allocated Tk 95,574 crore for various social safety net programmes, which was Tk 74,367 crore in the original budget and Tk 81,865 crore in the revised budget for this fiscal year.

The allocation is 16.83 per cent of Tk 568,000 crore budget and 3.01 per cent of Bangladesh's Tk 3,171,800 crore gross domestic product.

Under the SSNPs, the total number of beneficiaries rose 16.06 per cent to 66.11 crore from 56.96 crore in fiscal 2019-20.

The allocation for the new schemes rose to Tk 492.34 crore in fiscal 2020-21 from Tk 288.39 crore in the revised budget, data from the finance ministry showed. 

The allocation for gratuitous relief (GR) rose nearly six times to Tk 3,062 crore in fiscal 2020-21 from the current fiscal year's original budget. The number of beneficiaries would be 2.6 crore, up from 2.55 crore.

The allocation for the work for money programme doubled to Tk 1,500 crore, from Tk 750 crore. The number of beneficiaries rose to 15 lakh, which was 8.64 lakh in the outgoing fiscal year.

The budget has proposed to allocate Tk 972 crore for the open market sales operations, up from Tk 949 crore in fiscal 2019-20.

The allocation for the Food-Friendly Programme went up to Tk 3,844 crore from Tk 2,624 crore in the current budget, finance ministry data showed.

The stipend for the students at secondary and higher secondary levels went up 102 per cent to Tk 3,964 crore for the doubling of beneficiary students to 70.87 lakh from 35 lakh.

There are four stipend schemes and the overall allocation doubled from Tk 2,084 crore in fiscal 2019-20 to Tk 4,090 crore in the incoming fiscal year.

The stipends for the students at primary schools rose to Tk 900 crore from Tk 722 crore this year.

Kamal has proposed to allocate Tk 2,157 crore in fiscal 2020-21 for building homes for the homeless, which was only Tk 25 crore this fiscal year. The number of beneficiaries would be 2.55 crore, up from 2.96 lakh in fiscal 2019-20.

The allocation for the SSNPs includes Tk 3,000 crore set aside as interest rate subsidies for the loans going to the small and micro industries and services affected by the coronavirus pandemic.

Another Tk 2,000 crore has been allocated to subsidise partial interest waiver on the suspended loans at commercial banks.

In fiscal 2020-21, the government would distribute Tk 500 crore among 50 lakh families whose livelihoods have been affected by the pandemic.

Kamal has allocated Tk 6,625 crore to bear a part of the interest on the savings schemes.

There was no such allocation in the original budget for this fiscal year but the revised budget allocated Tk 6,766 crore for the purpose.

The agriculture ministry received Tk 1,900 crore in farm subsidies and the assistance would cover 87 lakh small and marginal farmers. The ministry got another Tk 2,500 crore for farm rehabilitation, up from Tk 160.85 crore this fiscal year.

Kamal has allocated Tk 322 crore in grants to the families of the government employees if they die while in duty. It was Tk 220 crore in the revised budget.

As part of the credit support programme, Tk 2,000 crore has been allocated for job creation through Palli Sanchay Bank, Probashi Kallyan Bank, Karmasangsthan Bank and Palli Karma-Sahayak Foundation.

Another Tk 3,000 crore has been set aside to run a refinancing scheme for the low-income farmers and small businessmen.

The allowance for the old-age scheme rose to Tk 2,940 crore from Tk 2,640 crore, for the widow, deserted and destitute women to Tk 1,230 crore from Tk 1,020 crore and financially insolvent disabled to Tk 1,620 crore from Tk 1,390.

The honorarium for freedom fighters was unchanged at Tk 3,385 crore and the allocation for pension for retired government employees and their families was slightly down to Tk 23,000 crore.

The allocation for the Vulnerable Group Development, one of the largest safety net programmes, was up 3.4 per cent to Tk 1,756, while the allocation for Vulnerable Group Feeding programme, which provides food transfers to the poor during disasters and major religious festivals, was down 52 per cent to Tk 940 crore.

Overall, the SSNP budget for the incoming fiscal year largely aimed to increase allocation for the traditional programmes, said Hossain Zillur Rahman, executive chairman of the Power and Participation Research Centre. 

The existing programmes are largely rural-based. But because of the coronavirus outbreak, the urban poor has emerged as a new group of poor. The government should give attention to it, he said yesterday. 

Of the allocation, Tk 5,000 crore in interest rate support for the micro and small industries and services, Rahman said.

They are part of the informal sector and a majority of them don't operate through the formal banking channel. However, they have access to microfinance institutions (MFIs). 

So, there is a question of whether this support through the banking channel would be implemented. The government should rather allocate Tk 5,000 crore to the micro and small industries through MFIs in low-cost loans and this will help revive the rural economy. 

The allocation for 50 lakh families would cover the new poor. But the need for the financing is much more given the urban poor and new poor created by the pandemic.

Rahman, also the chairperson of Brac, however, was surprised after seeing that the allocation for the primary school students in stipend dropped from Tk 11,165 crore in the revised budget to Tk 900 crore in the upcoming budget.

"This is a self-contradictory move. The government had scope to widen it as the transfer is done through banks and the mothers of the students receive it. It is also a question of women empowerment." 

Under the support programme, each primary school student gets Tk 100 per month and this amount was fixed in 2004.

"This should have been expanded to Tk 500 because the fund is well-utilised and goes directly to the major portion of the poor."

The drop-outs from the primary education level would accelerate because of the pandemic. 

"I hope the government would reconsider the stipend allocation for the primary school students. The reduction is not acceptable at all."

The allocation for the Open Market Sale and the Food Friendly Programme should be increased because the urban poor would need support in the upcoming months even if the lockdown is eased, Rahman added. 

Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh, welcomed the increased spending for the SSNPs but said there is a lack of targeting.

"The government is scattering money to too many SSNPs," he said on Thursday.

A temporary scheme should have been taken for those who have been laid off or lost jobs because of the economic fallout of the coronavirus pandemic.

"There is no such focus in the budget."