Safety Net Expenditure to be higher

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The budget allocation for safety-net services will see a big boost in the next fiscal year as the government looks to raise the number of recipients unable to make ends meet as a result of the coronavirus outbreak.

Finance Minister AHM Mustafa Kamal may set aside Tk 125,000 crore — more than 68% of Tk 74,367 crore in the current fiscal year — for various security net programs while unveiling the budget for the fiscal year 2020-21 on 11 June, said the finance ministry official.

 

The allowance will be three percent of the gross domestic product ( GDP), up from 2,58 percent in the year 2019-20.

Millions of workers have lost their jobs as a result of a national suspension levied on the deadly virus since March 26.

 

According to a joint survey by the Power and Participation Research Center (PPRC) and the Brac Institute for Governance and Development, 77.2 percent of vulnerable non-poor people fell below the poverty line due to the income shock caused by the pandemic.

That will mean who, above 20.5 percent of the population currently identified as poor, there is a category of “new poor” comprising an estimated 22.9 percent of the population who wanted to be included in the poverty discussion.

The condition has driven the government to increase the total spending on social security.

The allocation per beneficiary would not increase in terms of the amount; rather, the number of beneficiaries would increase.

 

The Government is raising the allocation of eight key safety net services, in particular food-based ones.

There are 81 lakh beneficiaries under the schemes and that number will increase by 10 lakhs.

 

The number of widows, destitute and deserted women eligible for Tk 500 per month of government support would increase by 8.5 lakh. About 2.5 lakh will be added to the list of financially insolvent people with disabilities who earn Tk 750 every month, said officials in the finance and social welfare ministries.

The number of recipients earning the maternity allowance will rise by 10%. Currently, 750,000 people are receiving such a payment. The rise in the number of beneficiaries will, to a large degree, have occurred in 100 poverty-prone Upazilas in the northern and central districts under a government program to ensure 100% social security net coverage of the existing 40%, officials said.

The Government is planning to use the bulk of the financial assistance received by the international partners for the purposes of the safety net. Donors also put the focus on rising spending on the disadvantaged and disabled.

“The rise was expected as many new poor people were created due to coronavirus failure,” said Hossain Zillur Rahman, Executive Chairman of the PPRC.

According to the economist, there are two facets of the safety net programs: one is the distribution and the other is the provision of assistance to the planned recipients.

 

“The second factor is really significant, so leakage is a big problem for us.”

The current safety net initiatives will continue. At the same time, the government should speed up the implementation of urban poor schemes because most of the initiatives address beneficiaries in rural areas, he added.

The safety net programs in Bangladesh have contributed to the reduction of poverty and vulnerability by addressing a range of population groups through different forms of assistance.

These include the provision of income security for elderly people, widows, and persons with disabilities, the generation of temporary employment for men and women of working age and the promotion of the healthy development of young mothers and children.A

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