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Budget FY21: Allocation for social safety net programs increased by 28.51 %

  • Published at 11:48 am June 11th, 2020
Social Safety Net
Representational photo Bigstock

The allocation is 3.01% of the GDP in FY2020-21

The government has proposed an allocation of Tk95,574 crore – a 28.51% increase from the last budget – for the 2020-21 fiscal year to support social safety net programs in a bid to fight poverty and Covid-19-related issues.

Finance Minister AHM Mustafa Kamal made the announcement while presenting the national budget for the upcoming FY21 in parliament on Thursday afternoon. 

“The government has allocated Tk95,574 crore in the social security sector, which is 16.83% of the total budget and 3.01% of the GDP in the 2020-21 fiscal year,”  said Kamal.

In the revised budget for FY2019-20, the allocation was Tk81,865 crore. 

“We are also implementing various programs for the welfare of the marginalized communities, besides helping people with disabilities,” the minister added.

However, experts fear that this amount is still not enough to feed the huge number of low-income people of the country who have lost their jobs through falling prey to the economic and health crisis caused by Covid-19. 

“Due to the recently lifted government-imposed shutdown, the income of the general people of our country has declined drastically and this is now threatening our achievements in poverty alleviation and ensuring social security, which is why I propose this allocation,” added Kamal.

“Besides, poor senior citizens in a total of 100 upazilas will be brought under the old age allowance program in line with existing policy as these areas are most prone to poverty due to the coronavirus crisis.

“And this will add 500,000 new beneficiaries, and an additional allocation of Tk300 crore will be provided to this particular program,” the minister said.

Kamal, during his budget presentation, also informed parliament that all widows and women abandoned by their husbands in the aforementioned upazilas would also be brought under the coverage of the allowance program as per government policy.

“This will add another 350,000 new beneficiaries, and an additional allocation of Tk210 crore will be provided to this program.

“On top of that, allowance for insolvent individuals with disabilities will be increased following the latest disability identification survey and through that 255,000 new beneficiaries will be added, involving an additional allocation of Tk229.50 crore,” the finance minister added.

Meanwhile, the minister also proposed allocating Tk100 crore to keep the rural economy moving amid the Covid-19 outbreak and create self-employment opportunities for the poor and helpless, under the Rural Social Services Program launched by Bangabandhu Sheikh Mujibur Rahaman in 1974.

The minister said that he believed with this incentive the government would be able to revitalize the rural economy through generating vitality and enthusiasm.

“In addition, initiatives such as maternity allowance for poor mothers, lactating mothers’ assistance program, vulnerable group development (VGD) activities, freedom fighters’ honorarium, creation of employment opportunities for the extreme poor, special allowance program for improving the living standards of gypsies and disadvantaged communities, education stipend and training for gypsies and disadvantaged communities, assistance for cancer, kidney and liver cirrhosis patients, living standards improvement program for tea garden workers, among others, will also continue,” the minister added.

Is this allocation enough?

In recent months, tens of thousands of people across Bangladesh have lost their jobs and slipped into poverty due to the coronavirus-forced countrywide shutdown, while the existing poverty has remained at 20.5%.

Following the recent shifts in the domestic and international economy, the Centre for Policy Dialogue (CPD), a local think tank, forecast that poverty across Bangladesh might rise by 35% this year.

“I don’t think the allocations made in this budget are enough for the low-income people of our country and especially for the new poor -- those who have fallen into poverty due to the pandemic.  These people need cash support to survive,” Selim Rahin, executive director of South Asian Network on Economic Modeling (Sanem), told Dhaka Tribune.

According to a Brac survey, 77.2% of the country’s vulnerable non-poor fell below the poverty line due to the income shock caused by the coronavirus outbreak.

“On the other hand, a huge sum of money from the social safety net programs is spent on providing pensions, which is a wrong concept,” added Selim.

“On top of that, the main concern here is how to reach these poor people and effectively disburse the money allocated for them.

“We have been increasing allocations in the social security sector every year to improve the conditions of the poor. By now, about one-fourth of families in the country have been brought under the social security program,” he added. 

He said: “In order to overcome this situation, the government has taken an initiative to make direct cash transfers to five million people in the current fiscal year to alleviate the sufferings of poor working people.”

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