2023-11-22 14:54:18 BdST
Subsidies to poor's bank accounts drop by 38pc in September
Even amid low-income people grappling with near double-digit inflation, government subsidy allocations to their bank accounts dropped substantially in September compared to August this year.
The central bank attributes the drying up of fund flow to the poor to the government's belt-tightening and redrawing expenditure line-ups, though economists have been calling for expanding the social safety net coverage through efficient public spending.
The government's subsidy allocations to the no-frill bank accounts -- typically maintained by marginalised people with an initial deposit of Tk 10, Tk 50 or Tk 100 -- dropped by over 38 percent to Tk 2.64 billion in September compared to the previous month, according to the latest Bangladesh Bank data.
In August, the subsidy flow to such accounts including the social safety net schemes stood at Tk 4.27 billion.
Besides, the central bank data showed the number of social safety net accounts marked a 0.40 percent decline to reach 10.61 million in September, while it was 10.66 million in August.
However, deposits in no-frills accounts grew by 4.64 percent to over Tk 56.43 in September whereas it was Tk 53.93 billion in August.
Subsidy disbursement in urban areas was Tk 1.32 billion in September, as it was Tk 1.31 billion in rural villages in September.
Underprivileged and extremely poor people receive government allowances through no-frills accounts. This initiative plays a significant role in bringing those people under the formal banking network.
About the September subsidy fall to those accounts, Bangladesh Bank Executive Director and Spokesperson Md Mezbaul Haque said the government is judiciously releasing its funds, and this could be one of the contributing factors.
He mentioned that typically, such support experiences an uptick in June and December during a fiscal year.
Echoing the central bank spokesperson, Dr M Masrur Reaz, chairman of the Policy Exchange Bangladesh, said the reduction of subsidies might be due to the government's tight fiscal position.
"But this comes at such a wrong time!" he questioned the tight-fisted implementation, as inflationary woes weigh heavily on low-income people.
Dr Masrur also cast doubt on the government's fiscal capacity, suggesting that it may be facing challenges. He called for fund reallocation to alleviate the suffering of the poor.
Unauthorized use or reproduction of The Finance Today content for commercial purposes is strictly prohibited.