Safety net needs to be expanded by minimising corruption
The government has no control over most factors that are pushing up commodity prices in recent times and it also does not have financial capacity to rein in the prices by giving subsidies. In this situation, we have to be ready to accept that prices will go up further in the future.
Now, the question is how many people will see their income keep up with increasing prices?
A large number of people in the country are living below the poverty line and their income is not enough to meet their daily needs. If goods prices shoot up, the poor will become poorer. Again, more people will plunge into poverty.
The onus now is on the government to keep all people's purchasing intact. The government has to take special initiatives to support the poor grappling with rising commodity prices. The expansion of cash and food support under the social safety net will play the biggest role to this end.
The central bank has taken several initiatives, such as increasing LC margins for non-essential and luxury items and devaluing taka against dollar. The National Board of Revenue has reduced import duty and value added tax on some essential commodities, but the trend of price rises in the country's market has not abated. As a result, the most-affected are low-income people.
The government is trying to supply goods at lower prices through TCB truck sales as it is not possible to control prices of products through market management.
Earlier, TCB's sales of goods at subsidised prices did not yield much result, with a large population outside cities having been deprived of the facility. Collecting goods from trucks is time consuming for beneficiaries. And, proper targeting cannot be ensured this way too.
Now, the initiative to sell products through ration cards in fair price shops is also very challenging. Earlier, the government was forced to cancel the rationing system in the 1980s because of massive corruption.
Moreover, no initiative of the social safety programme becomes successful owing to massive irregularities. On many occasions, the deserving people lose out on government support, but many non-poor people get into the list of beneficiaries.
The biggest problem in providing income support to the poor is the lack of up-to-date data. No Household Income and Expenditure Survey has been conducted since 2016. If we cannot create a database of poor people, anomalies in selecting beneficiaries will continue. We cannot include public representatives in determining beneficiaries under the social safety net owing to a lack of capacity of our local government.
Such a list of beneficiaries is maintained by local governments and local administrations in all countries, including neighbouring ones. But in our case, party workers at the grassroots level get priority in selecting the recipients. Such problems will not be resolved if local government is not strengthened.
I will suggest giving cash rather than goods under social security programmes so beneficiaries can buy products of their choice.
On the other hand, chances of corruption go up during food distribution. For example, on many occasions, we witnessed weight manipulation and distribution of low-quality food products. Besides, there are additional expenses on transportation, storage and distribution of goods.
The government gave poor families Tk2500 each in cash aid through mobile financial services to help them cope up with the coronavirus crisis in two phases in the aftermath of Covid-19. But there was massive corruption over the distribution of food relief during the time.
