National budget FY25-26: Govt to recast social safety net schemes

• Number of schemes likely to be reduced to around 100 
• Allocation for the schemes to rise to Tk 95,908 crore
• 38 schemes to be grouped under a 'pro-poor' section
• Cash assistance to rise by Tk 50-100 per person 
• Number of beneficiaries to rise by 10 lakh

The interim government is likely to introduce a transparent system for social safety net schemes in the upcoming budget, increasing the number of beneficiaries by around 10 lakh while slashing one-third of the existing programmes.

In the new system, there will be fewer than 100 schemes, down from the current 140. Thirty-eight of the schemes will be grouped as "pro-poor" as suggested by the European Union and other development partners.

Assistance under this section will be targeted at the extreme poor, finance ministry officials said.

Economists have for years pointed out that the budget allocation for the social safety net seemed larger than it actually was, because the allocation included funds for various programmes, including ones under the development budget.

The government intends to streamline the system by removing such programmes to reflect a more accurate picture, according to the officials.

The upcoming budget documents will detail the specific allocations for each of the social safety net schemes, they said.

For the social safety net schemes, the government is likely to set aside Tk 95,908 crore in the fiscal year (FY) 2025-26, accounting for 12.18 percent of the total outlay. In the current fiscal year, the allocation for these schemes was Tk 90,468 crore, which was 11.35 percent of the total budget.

The allocation for the existing 140 social safety net programmes was Tk 136,026 crore in the current budget. If these programmes were carried forward, the total allocation in FY26 would rise to Tk 144,655 crore.

Selim Raihan, executive director of the South Asian Network on Economic Modelling (SANEM), a think tank, said there had been a longstanding demand for streamlining the social protection schemes.

"I think it is good that the government intends to streamline the social safety net programmes, though I am not sure which programmes are being dropped," he told The Daily Star.

Social safety net programmes are designed for poor and marginalised families, but their allocation remains inadequate. "In terms of the GDP, Bangladesh spends the least in the world. We must see how these concerns are addressed in the next budget," he said.

BOTH ALLOWANCE AND BENEFICIARIES TO RISE

Apart from the number of beneficiaries, the monthly allowance in core cash assistance programmes will increase by only Tk 50 to Tk 100 in the next fiscal year.

About the allowance, Selim said such an increase had been made in every budget, but the amount is insignificant. "Will they be able to buy anything additional with the increased sum?"

Finance ministry officials said revenue earnings of the government remained low, while it had to spend a large amount on interest payments, subsidies, and salaries and allowances. As a result, it is difficult to significantly increase the allowances under the safety net schemes.

The government is likely to allocate Tk 52,366 crore for 38 schemes meant for the extreme poor.

Of the schemes, the largest programme is the "Old Age Allowance", introduced in fiscal year 1997-98 to provide social security to the elderly people who are poor and unable to earn.

Under this scheme, the monthly allowance next year will be increased by Tk 50 to Tk 650. Earlier in 2023, the allowance was Tk 600 a month per person and it remained unchanged despite high inflation.

In the next budget, the government will raise the number of new beneficiaries under the Old Age Allowance programme by 100,000.

The number of beneficiaries of the programme was 60.01 lakh. In the current budget, Tk 4,350 crore has been allocated for the programme.

The government's second largest safety net programme is the "Allowance for the Widow, Deserted and Destitute Women" programme.

From the next budget, the monthly allowance under the programme will be increased by Tk 100 to Tk 650 while the number of new beneficiaries will be increased by 1.25 lakh, in addition to the existing 27.75 lakh.

Launched in 1998, this programme has been supporting women in rural areas in alleviating their poverty. In the current fiscal year, Tk 1,844 crore has been allocated for the programme.

Under the "Allowance for the Physically Challenged Persons" scheme, the monthly allowance will be increased by Tk 50 to Tk 900 per person in FY26. Besides, 2 lakh new beneficiaries will be added to the existing 32.34 lakh.

In the current budget, Tk 3,321 crore has been allocated for the scheme.

Meanwhile, under the "Improvement of the Livelihood of Bede, Hijra and Disadvantaged Communities" scheme, beneficiaries would receive Tk 650 a month instead of Tk 600.

The monthly allowance under the "Mother and Child Benefit Programme" scheme, will also be increased by Tk 50 to Tk 850, while the number of beneficiaries will reach 17.71 lakh, up from the existing 16.50 lakh.

The government will provide rice to 55 lakh families at a low price under the "Food Friendly Programme", with 10 lakh tonnes of rice to be distributed in the next financial year.

For the current financial year, 760,000 tonnes of rice have been allocated for 50 lakh families.

The families would be able to buy 30-kg rice at a low price for six months instead of five months.

Under the "Employment Generation Programme for the Poorest", the government now provides Tk 200 a day as wages to beneficiaries for a maximum of 40 days a year.

The daily wage will be increased to Tk 250, while the number of beneficiaries will reach 6 lakh, up from the existing 5.18 lakh.

Selim Raihan emphasised the need to increase per-person allocations to ensure that social safety net assistance has a meaningful impact on beneficiaries' lives.

"Extensive research has been conducted on the challenges facing our social safety net programmes and the measures required to address them. I hope the upcoming budget will reflect some of them and move in the right direction."