Safety Net Allocations: Rise far from enough

Although the size of allocation for social security programmes has enlarged, the government has made no significant changes to cushion the vulnerable groups of people from persistent inflationary pressure.

Allocation for safety net programmes in the budget for the next fiscal year has been raised 11 percent from Tk 1.13 lakh crore to Tk 1.26 lakh crore. The allocation is 16.58 percent of the total budget and 2.52 percent of the gross domestic product.

In a recent review report on Bangladesh's economy, the Centre for Policy Dialogue says that the share of allocation for safety net programmes that actually provide protection to the poor keeps declining. On the other hand, the share of loosely related or completely unrelated programmes, such as pension schemes for retired government employees, are included on the list and keeps increasing over the past 13 years.

Pension scheme constitutes 22 percent of safety net allocations in the proposed budget compared to 25 percent of the current fiscal.

However, there is still some good news for the elderly and destitute women. Kamal has proposed increasing the monthly allowance for the elderly from Tk 500 to Tk 600 and for the widowed, deserted and destitute women, from Tk 500 to Tk 550.

The number of beneficiaries in both categories has been increased by 1 lakh, taking the total to 58.01 lakh and 25.75 lakh respectively.

Though the monthly allowance for people with disability remains the same at Tk 850, the number of beneficiaries has been proposed to be increased from 23.65 lakh to 29 lakh.

"The inclusion of a formal pension for retired government employees should not be included in the social safety net programmes," said Binayak Sen, director general of the Bangladesh Institute of Development Studies.

He said the social security programmes are the only government instruments  through which the poor and ultra-poor people get some protection.

The proposed allocation should have been bigger considering the inflationary pressure, he said adding that the current allowance is equal to one day's agricultural wages.

Echoing Sen, economist Rizwanul Islam, said the coverage, even after the proposed increase of its size, is small considering the total number of eligible beneficiaries.

"The amounts allocated per beneficiary are woefully inadequate," said Islam, former special advisor, Employment Sector, International Labour Office, Geneva.

The approach proposed in the budget will not create any sustainable solution to the problems faced by the poor and the destitute, said Prof Selim Raihan, executive director of the South Asian Network on Economic Modeling, adding that it's not desirable for inclusive growth.

Raihan went on to say that the government or policy makers have a wrong perception about the country's number of poor and ultra-poor people.

"They think that the poor people have been reduced to a great extent and ultra-poor people have almost not existed in the country," he said adding that the budgetary allocation for social security programmes has usually been made from this wrong perception, which should be changed.

Bazlul Haque Khondker, former professor of economics at the University of Dhaka, said that the government should make specific allocations for the urban poor.

The government should specifically allocate funds for improving databases, digital payment system and beneficiary selection, he said.