Social safety net to expand to Tk 1.01tn in FY22

The government is likely to expand its social safety net to Tk 1010 billion in the budget of upcoming 2021-22 fiscal year to safeguard vulnerable people from the impacts of coronavirus pandemic.

The allocation will be 17.04 percent of the fiscal budget or 2.84 percent of the GDP.

The tentative social safety net size was fixed in the FY21’s first meeting of Budget Monitoring and Resources Committee held at the secretariat with Finance Minister AHM Mustafa Kamal on Thursday.

The government has allocated Tk 955.74 billion in the current fiscal year which is 16.83 percent of the fiscal’s budget.

The government has proposed for additional Tk 11.19 billion that stands Tk 190 billion in the coming fiscal for

Support of food assistance, including OMS, VGF, food for work etc, is set to rise to Tk 190 in FY22 from Tk 179.81 billion this year.

Besides, freedom fighter allowance, maternity allowance, senior citizen and widow allowances may also increase to Tk 120 billion in FY2022 from Tk 102.12 billion in the current fiscal year.

The loan for small and medium entrepreneurs will also increase to Tk 650 billion in FY’22 from Tk 623.91 billion in the current fiscal.

The poverty eradication and manpower generation will get one of the top priorities in the coming fiscal year under the social safety net programme, official sources said.

Economists said the government should go for automation with preparing proper data-base for best utilisation of the social safety net allocation.

“Around 150 safety net programmes have so far been designed by the government. But the allocation of the safety net was not utilised properly due to lack of proper data base,” PRI executive director Dr Ahsan H Mansur said on Saturday.

He said one man should not be covered by more than one safety net schemes to avoid pilferage in the programmes.

“Without proper data-base, the safety net fund must be misused,” he said.

The size of the next fiscal’s budget is likely to be Tk 5,925.65 billion or GDP’s 16.7 percent to pump in enough funds to priority areas to support economic recovery from Covid-19 impacts.

With the increased expenditure plan, the expects to achieve a realistic 7.7 percent GDP growth while keeping inflation rate at 5.3 percent to revamp the economy dented by the unprecedented global virus pandemic.

Alongside widening the social safety net, the government will also provide accommodation for homeless people in line with the government’s commitment in Mujib Borsho.

Revised budget outlay for the current 2020-21 fiscal year is going to be downsized by 5.28 percent to Tk 5.3 trillion from Tk 5.68 trillion. The new budget will be 10.1 percent larger than the revised budget.

Of the estimated budget of FY22, the size of Annual Development Programme (ADP) will be 8 percent higher at Tk 2,130 billion while operational expenditure will stand at Tk 3,795.65 billion, which will see an 11.3 percent rise.

With the new budget, the government eyes to successfully implement its Covid-19 stimulus packages with increased allocation on the health sector and providing incentives and compensation. Agricultural mechanization, rehabilitation, incentives on irrigation and seed and continuing subsidy on fertilizer; huge job creation and rural development will get priority.