The Financial Express

Social safety net allocation may go up during passage of budget

| Updated: June 28, 2021 15:59:43

Picture used only for representation — Collected Picture used only for representation — Collected

Responding to calls from economists and experts, the government may increase further the allocation for the social safety net programme (SSNP) in the budget for the fiscal year 2021-22 which is slated for adoption by parliament on Wednesday, officials said.

While placing the proposed budget for the next fiscal year on June 3, the finance minister allocated some Tk 1.076 trillion for the social safety net sector which includes pension money for public servants and profit disbursed against the government savings tools.

The total allocation is equivalent to 3.11 per cent of the gross domestic product (GDP) of the country.

The "inadequate" allocation for social safety net during the pandemic period, when a large number of people slipped into poverty after losing their jobs and other income sources, was strongly criticised by economists and social scientists.

The Centre for Policy Dialogue (CPD), a local think tank, in its budget reaction said the allocation for social safety net in the proposed budget has increased by 12 per cent. The increase is lower than the average rate of 17 per cent in the last decade.

It said the allocation for pension, which is included in the social safety net sector, has increased by 16 per cent, higher than that of the increase in allocation for overall social protection.

The CPD also said the allocation for social safety net now stands at only 2.4 per cent of GDP, excluding pension, which alone needs to be enhanced to over 4.0 per cent of GDP.

A senior finance ministry official told the FE on Sunday that the government has taken note of the opinion from various quarters and is considering an increase in allocation.

"The allocation may be increased when the budget is passed in parliament or during its implementation," he said.

Finance Minister AHM Mustafa Kamal earlier told newsmen that the worries over small allocation for the welfare of the poor people would not persist, once the budget implementation starts.

He said the beneficiaries will be visible, once the implementation of the new budget begins. "We have framed the budget to cover the people for whom you are worried about."

According to the findings of a joint research conducted by Power and Participation Research Centre (PPRC) and Brac Institute for Governance and Development, unveiled on April 20, the pandemic has pushed 24.5 million more people into poverty.

The CPD in April said due to the pandemic, some 16.38 million had been pushed down the poverty line. An estimated 20.5 per cent population were below the poverty line during the pre-pandemic time.

Private-sector think tank--South Asian Network on Economic Modeling (SANEM)--found that some 42 per cent of the country's total population are now living in poverty. The pandemic has pushed down some 25 million to 30 million below the poverty line.

They said the allocation for protection from poverty and bring the new poor back to the previous level is not adequate in the proposed budget. They suggested the government enhance allocation before the budget is passed.

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