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Rescuing 75.7mn poor: CPD proposes monthly handout of Tk8,000 for each household

  • Published at 11:49 am April 13th, 2020
aid to poor-food -poverty-mehedi hasan-DT
Photo: Md Manik

It demands rent subsidy for restaurants and tech start-ups, comprehensive stimulus package involving Tk30,000cr for vulnerable households

The Centre for Policy Dialogue (CPD) on Monday urged the government to allocate a monthly cash handout of Tk8,000 for each household from 75.7 million marginalized people, saying the government rescue package lacked any specific allocation for the group.

The think-tank proposed to continue the handout scheme for two months so that poorest could survive during the Covid-19 emergency period.

It termed the government’s lifeline measures a liquidity support rather than a fiscal stimulus package as lion portion of the Tk78,000 crore is repayable loan.

CPD came up with the observations at an online briefing, titled “CPD’s Initial Assessment of Public Policy Interventions and Proposals for Food and Income Security of the Marginalized.” 

Three groups of vulnerable people should be considered for the proposed handout, it said. They are daily labourers, paid employees (daily or weekly) and self-employed.

Only Tk26,962 crore would be needed to launch the scheme for 68.4 million poor and Tk29,852 crore if the handout was provided to 75.7 million poor, estimated the CPD.

“These people generally do not have adequate savings to face the type of disruption in income generating activities that they are currently facing,” CPD said in its briefing document.

“There is no explicit allocation made for vulnerable groups who are the farthest behind and will be the hardest hit by the pandemic.”

It said the Tk250 crore allocations made to the Ministry of Health and Family Welfare is inadequate, given the prevailing grave health crisis the country is in because of the coronavirus pandemic.

Focusing on the government stimulus package, CPD said the largest industries that were relatively more capable of dealing with shocks were getting the greatest support.

Besides, it said there was no direct transfer of funds from the government to the workers, and there was no plan for supporting informal sector workers and returning migrant workers in the packages.

The think-tank criticized the government for channelling lion portion of its package through the ill-governed banks.

Some 93.3% or Tk72,750 crore of the total stimulus package of Tk78,000 crore will be channelled through the miserably performing and poorly governed banking sector, it mentioned.

The briefing document said the lion’s share of the stimulus package — Tk72,750 crore — was repayable loan. “In other words, this is more of a liquidity support rather than a fiscal stimulus package.”

“It is important to recall that the banking sector itself was in need of a stimulus package from the government to set-up a banking commission and a public asset management company,” it pointed out.

Recommending a set of measures, CPD said a mechanism allowing cash transfer to the workforce involved in the informal sector should be implemented. 

Besides, entrepreneurs of small businesses such as restaurants and tech start-ups, with monthly revenue of less than Tk4 lakh should be provided with rent subsidy during the lockdown period and for one month thereafter, it recommended.

On March 25, the government created a credit line by forming a Tk5,000 crore revolving fund for the export-oriented sector to pay workers’ wages. Later, the government formed four more funds totalling Tk67,750 crore, and on Sunday another of Tk5,000 crore for the agriculture sector.

“Needless to say, in these bailout packages, we did not see any specific allocation for the marginalized and vulnerable group,” said CPD Executive Director Fahmida Khatun.

Although Prime Minister Sheikh Hasina said that the government would ensure foods free of cost, but now rice is being sold in open market at Tk10 per kilogram, she said.

The government on Monday suspended open market sale of rice, following widespread misappropriation and corruption over the foodgrain meant to help the people going through a tough time because of the ongoing shutdown.

Fahmida added: “The vulnerable groups are relatively more exposed to the threat of Covid-19. But, they are yet to receive any organized support. As per the government data, 66% of the elderly population and 70.6% of children in the country are not covered by any social protection measures.”

“It is critically important to ensure food and income security of the society’s marginalized section during this Covid-19 pandemic and subsequent disruptions of economic activities,” CPD Senior Research Fellow Towfiqul Islam Khan said in his presentation.

People belonging to the lower income group, particularly those employed in the informal sector, and about 85% of total employed populations of the economy were among the most vulnerable, he said.

The CPD suggested for an initial assessment of public policy interventions and proposals for food and income security of the marginalized, estimating the number of targeted citizen’s delivery of financial resources and ensuring good governance in the delivery.

Considering the above, estimated number of target participants would be 17 million households, of which 17.4% is from urban areas employed with monthly income being less than Tk10,000 along with day and paid labour under the lower case scenario, which would cover about 68.4 million citizens, the think-tank said.

On the other hand, 19 million households, of which 18.9% is from urban areas (considering self-employed with monthly income being less than Tk11,000 along with day and paid labour) under the higher case scenario, which would cover about 75.7 million citizens, it added.

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