Social safety net budget praiseworthy, but inadequate

As Covid-19 has affected the livelihoods of millions, especially those belonging to the lower end of income distribution, expanding the existing coverage of the social safety net programme to incorporate the "new poor" has been a key challenge for this budget. 

In the budget for the fiscal year 2020-21, an allocation of Tk6,096 crore has been proposed to extend the social safety net coverage to about 1.62 million new recipients. 

The coverage and allocation of three major social security programmes – old age allowance, widow and deserted women allowance, and allowance for disabled people – are expected to increase. 

This effort, though praiseworthy, is not adequate considering the severity of Covid-19 on the earnings of the vulnerable population. 

Besides, one critical area that has always been ignored in the social safety net schemes is the needs of the urban poor. In this budget, though 14 different population groups have been covered under different safety net schemes, no specific initiative has been proposed for the urban poor, especially for those living in urban slums. 

However, one important scheme that has been proposed in the upcoming budget is the Tk100 crore allocation for the rural social services programme, aimed at creating self-employment opportunities for rural people. This scheme is definitely a step forward towards employment generation for vulnerable people, especially against the backdrop of the coronavirus pandemic.

In terms of total allocation, it should be mentioned that, in the budget for the fiscal year 2019-20, safety net programmes constituted around 2.56 percent of the GDP, with the bulk of this allocation dedicated towards the government's pension and school stipend programmes. 

In the proposed budget for FY2020-21, the total allocation has been raised to Tk95,574 crore, which is 16.83 percent of the total budget, or 3.01 percent of the GDP. This, although a positive move towards inclusive development, is not sufficient, especially while considering the severity of the pandemic. 

There is no denying that the success of safety net programmes primarily lies on effective targeting. Therefore, bringing transparency to the system through digitalisation and introduction of monitoring and evaluation mechanisms to the budgetary framework is essential for saving the livelihoods of the vulnerable population.

The writer is a professor at the Department of Economics, University of Dhaka.