New safety net funds for poor

The government has created two separate funds worth a combined Tk 12,300 crore under its massive social safety net programmes in the next fiscal year for targeted populations and low-paid informal sector workers.

Of these funds, Tk 7,300 crore has been earmarked for the purpose of providing cash assistance to the poor and vulnerable and addressing Covid-19 health risks, according to the budget documents.

Another Tk 5,000 crore fund has been created for assisting affected day labourers, farmers, domestic workers, and those imperiled by natural calamities such as untimely floods, storms, hailstorms, and cyclones.

However, the government is yet to come up with details of the beneficiaries of these funds.

"The work to prepare the list of beneficiaries for both the activities is going on and will be determined according to the necessity in fiscal year 2021-22," stated the finance ministry's budget documents.

With these two newly created funds, the government yesterday proposed to allocate Tk 1,07,614 crore for social safety net programmes in FY 2021-22, aiming to bring around 14 lakh new people under social protection.

The amount is 17.83 percent of the total budget and 3.11 percent of the gross domestic product (GDP), Finance Minister AHM Mustafa Kamal said while presenting the national budget yesterday afternoon.

This is the first time the budgetary allocation meant for the poor and vulnerable crossed the Tk 100,000 crore mark. It was Tk 95,574 crore in last year's revised budget.

The funds will be used to implement and expand the coverage of various social security programmes designed to reduce poverty in the country.

Earlier, the government provided cash assistance to nearly 35 lakh poor families facing income losses and hardship during the shutdown imposed in the wake of the second wave of Covid-19. Each family received one-off cash support of Tk 2,500 before Eid-ul-Fitr, celebrated last month.

Around the same time, the government gave financial assistance to farmers who suffered losses of Boro crop due to the nor'wester and heatwave that swept the country in the first week of April. Each affected farmer received one-off cash support of Tk 5,000.

Economists, however, maintained that delivering the support to intended beneficiaries is the main challenge as there were previous examples of corruption and irregularities such as the selection of ineligible beneficiaries and other misuse of funds, which deprive many of the genuine poor and vulnerable from social protection benefits.

When the first Covid-19 wave hit the country in March last year, the government with input from field-level officials prepared a list of 50 lakh families in need of financial support with a view to providing one-off Tk 2,500 cash support under a Tk 1,258-crore stimulus package.

The target beneficiaries included rickshaw-pullers, day labourers, construction workers, farmers, shop employees, people working at small businesses, and transport workers.

As the distribution of money began in May last year, allegations of anomalies in the list of beneficiaries cropped up with names of solvent people found on it, forcing the government to halt it midway.

After cross-checking all the names, the finance division struck 14.32 lakh names off the list and finalised the list with 34.97 lakh names as beneficiaries.

On the basis of the list of 34.97 lakh beneficiaries, the government in April provided the same amount of financial support again this year.

SAFETY NET COVERAGE INCREASED

In the proposed budget, the government aimed to bring more of the country's marginalised and vulnerable population under protection.

"To protect the country's poorest segment from unemployment and loss of income due to the pandemic, our government has taken steps to widen the coverage of the social safety net," the finance minister said in the budget speech.

Presenting a set of proposals to widen the coverage of social safety net programmes, the finance minister said from the next fiscal year, coverage of 100 percent deserving poor elderly people will be extended to 150 most poverty-stricken upazilas, from the existing 120 upazilas.

This will add eight lakh new beneficiaries and an additional allocation of Tk 481 crore will be provided to this end.

Similarly, coverage is being increased for widows, deserted and destitute women, which will add 4.25 lakh new beneficiaries and an additional Tk 255 crore will be allocated for this purpose.

Although the number of recipients will increase, the individual amount will remain unchanged – with the women receiving between Tk 500 and Tk 750 a month based on their category.

The government proposed to increase the number of beneficiaries of the Insolvent Disabled Person Allowance Programme by 2.02 lakh as per the latest disability identification survey. As a result, the allocation of this program will increase by Tk 200 crore in FY 2021-22.

There will be an increase in the monthly honorarium of the freedom fighters from Tk 12,000 to Tk 20,000 in next fiscal year as per the promise made by Prime Minister Sheikh Hasina in February. This will require an increased allocation of Tk 1,920 crore.

Analysing the proposed social safety net schemes, it was found that nearly a quarter of the allocation or Tk 26,690 crore will be spent to provide pensions for 7.53 lakh government employees.

Also, a large amount of money has been allocated for interest subsidy, interest exemption, refinancing scheme for farmers and employment generation programmes of government banks, which mostly reached big businesses.

The budget for food assistance programmes such as vulnerable group development, vulnerable group feeding, test relief, and food for work programmes have also been increased.

Despite such an increase in allocation, there are concerns raised by experts and various studies that the real poor and vulnerable usually do not benefit from a large portion of social protection allocation.

In September last year, a Centre for Policy Dialogue (CPD) study found that 65 percent of the fund from the government's social safety net programmes went to the non-poor owing to nepotism, corruption and political consideration in selecting beneficiaries.

Titled "Efficiency of Delivering Social Protection Programmes in the North-West Region", the study conducted by CPD said the safety net programmes can only cover a fraction of the total poor population as just 32.5 percent poor households received some form of assistance.