Originally posted in The Daily Star on 25 March 2025
Wider safety net to cover 10 lakh more next year
Allowances, however, to increase by only Tk 50 to Tk 100
The government will increase the number of beneficiaries of various social safety net schemes by at least 10 lakh from fiscal year (FY) 2025-2026, but allowances will see a small increase, although poor groups have been facing stubbornly high inflation for years.
The finance ministry, after consultation with relevant ministries, has drafted a plan to increase the number of beneficiaries and the monthly allowance.
The plan will be finalised at a budget-related government meeting next month, a senior finance ministry official said.
From the next fiscal year, the monthly allowance will increase by only Tk 50 to Tk 100.
However, economists, during a pre-budget meeting with Finance Adviser Salehuddin Ahmed, suggested increasing the monthly allowance of different social safety programmes.
A recommendation from the meeting was to provide at least Tk 3,000 a month to each beneficiary under the schemes. The current allowances range from Tk 600 to Tk 800 per month.
Later, the finance adviser told reporters that they would increase the allowance to some extent, but considering the government’s limited resources.
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 increase the allowances under the safety net schemes significantly.
Prof Mustafizur Rahman, a distinguished fellow of the Centre for Policy Dialogue (CPD), said the increase was a positive step, but still insufficient.
He said in recent years, as people struggled due to rising commodity prices, the number of those entitled to such support had grown, while their need for cash aid had also increased.
He added the budget’s limitations were understandable but stressed the need for a mid-term plan on how to achieve a transition from social safety to social security.
“The main focus should be on how the number of people in need can be reduced by creating employment opportunities through increasing investment,” Prof Rahman further said.
He emphasised that these aspects must be prioritised in the upcoming budget.
From the next budget for FY26, a “Dynamic Social Registry” system, financed by the World Bank, will be introduced to minimise safety net leakage and corruption.
A finance ministry official said the World Bank would provide $200 million, including $117 million as budget support, for the smooth operation of the new system.
The government’s largest social safety net programme is the “Old Age Allowance” programme.
Under this scheme, the monthly allowance next year will be increased by Tk 50 to Tk 650. Earlier in 2023, the government set the allowance at Tk 600 a month per person.
Although the country has continued to face high inflation since 2023, the government did not increase the allowance so far.
In the next budget, the government will increase the number of new beneficiaries under the Old Age Allowance programme by 100,000, which will be added to the existing 60.01 lakh beneficiaries as of the fiscal year 2024-25.
The Old Age Allowance programme was introduced in fiscal year 1997-98 to provide social security to elderly people who are poor and unable to earn. At that time, Tk 100 was provided to each beneficiary a month.
The main objective of the unconditional cash transfer programme is to support the livelihood of elderly people and enhance their status in the family and society, according to the government’s Social Security Budget Report 2024-2025.
In the current budget, Tk 4,350 crore has been allocated for the Old Age Allowance programme.
After the Old Age Allowance 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.
Besides, the number of new beneficiaries will be increased by 1.25 lakh, in addition to the existing 27.75 lakh.
In 1998, the government started this programme for widows, deserted and destitute women in rural areas to support them in alleviating their poverty.
At that time, Tk 100 was provided as a monthly allowance to each beneficiary.
In the current fiscal year, Tk 1,844 crore has been allocated for the programme.
Besides, 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.
In addition, 2 lakh new beneficiaries will be added to the existing 32.34 lakh beneficiaries.
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 receive Tk 500 to Tk 1,200 a month.
From the next budget, the government will provide them with at least Tk 650 a month.
Also, under the “Mother and Child Benefit Programme” scheme, the monthly allowance will 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.
Under the “Food Friendly Programme”, the government will provide rice to 55 lakh families at a low price, 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 distribution among 50 lakh beneficiary families.
Under the programme, the government sells rice twice a year during lean periods to beneficiaries at a low price.
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.
From the next financial 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.
Last month, the Cabinet Division issued a circular to primarily provide allowances under the “Dynamic Social Registry” system for four schemes — “Old Age Allowance”, “Allowance for the Widow, Deserted and Destitute Women”, “Allowance for the Physically Challenged Persons”, and “Mother and Child Benefit Programme” — on a pilot basis.
In the first phase, the pilot project will be implemented in eight upazilas.
A 10-member committee, headed by a Cabinet Division secretary, will monitor the entire system.
Under the system, a platform called the Social Protection Budget Management Unit (SPBMU) will be established at the finance ministry, where beneficiaries will be registered.
For this, the government is undertaking a five-year project, at a cost of $200 million, funded by the World Bank, from this year.
Of the budget, $83 million will be spent on software and related works.
Under the current budget, Tk 136,026 crore has been allocated for about 140 social safety net programmes, which make up the government’s total social security programme budget.