Single cash assistance will increase slightly in FY23

Only one of eight monthly direct cash safety net programs is expected to increase slightly in the next national budget, finance division officials said.

An announcement in this regard is expected to be announced by Finance Minister AHM Mustafa Kamal in parliament on June 9 when the new national budget is tabled.

An increase in the allowance of 100 for financially insolvent disabled citizens is planned from 750 Tk to 850 Tk.

Finance division officials said the monthly cash allowance for elderly citizens, widows, abandoned and destitute women, transgender people and freedom fighters would likely remain the same.

They blamed lack of funds for keeping almost all rates unchanged.

Economists say government should expand coverage of social safety net programs and raise rates, especially for elderly citizens, widows, abandoned and destitute women amid inflation over 6% for three months consecutive until April.

From the financial year 2019-2020, financially insolvent disabled citizens receive a monthly cash allowance of Tk 750.

In the outgoing financial year, about Tk 1,820 crore had been allocated to these segments of the population.

Some 18 lakh of them received stipend in FY21.

Elderly citizens, widows and destitute women are given Tk 500 since FY 2017.

Transgender people have received 2,600 Tk each since FY20, while freedom fighters 20,000 Tk each from the outgoing FY.

In addition to cash transfers, more than 100 types of social safety net programs are managed by the government through the national budget.

In the outgoing financial year, Tk 1.07 lakh crore had been earmarked for comprehensive social safety net programs.

The allocation for programs is expected to be Tk 1.13 lakh crore in the coming FY23.

Professor MahbubulMokaddemAkash, chair of the economics department at the University of Dhaka, said the government should spend more on social safety net programs to protect the poor from spiraling prices of basic necessities in a context volatility in the global commodity market due to the war between Russia and Ukraine.

In the outgoing fiscal year, projected spending on social security was 3.1 percent of the country’s GDP.

Economists have noted that middle-income countries’ spending on the social security program is between 6% and 8%.

Bangladesh became a lower-middle-income country in 2014 according to World Bank criteria and now aspires to become a middle-income country by 2030.

Distinguished Center for Policy Dialogue colleague Mustafizur Rahman said the government should introduce a digital database for better results from social safety net programs.

Referring to a mid-term review of the National Social Security Strategy published in July 2020 by the General Economics Division, economists observed that the report found flaws in the selection of program beneficiaries.

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