Cheap shops hailed for flow

Cheap shops hailed for flow

The government estimates the Thong Fah Pracha Rat low-priced shop scheme will help generate about 450 billion baht worth of money to be circulated in the Thai economy.

Whichai Phochanakij, deputy permanent secretary of commerce, said state welfare cardholders normally spend much more than the 200-300 baht given to them by the government, with many spending up to 500-1,000 baht per transaction.

"The government has already allocated about 48 billion baht to finance the state welfare scheme, and that money has produced 96 billion worth of transactions for the retail shops in the scheme," he said. "Such money will create a multiplier effect, with the ministry expecting it will circulate five rounds worth 450 billion baht, half of which will benefit the local economy."

A multiplier effect occurs when an economic activity initiates a chain of transactions where an economic input produces an increase in the economic output. An example could be an increase in government spending causing a greater increase in GDP, or an increase in bank deposits causing a greater increase in the money supply.

Mr Whichai said a number of local or community producers have supplied goods to Thong Fah Pracha Rat shops such as shrimp paste, seasonings, dried shrimp and fish, fermented fish, and northern Thai spicy sausage. The ministry is hiring the Rajabhat universities to collect data on income from community products sold at the shops.

The Thong Fah Pracha Rat shops are part of a 41.9-billion-baht aid package approved by the cabinet last August, aimed at 11.7 million low-income earners -- 5 million of whom live below the poverty line. Apart from providing low-priced consumer goods, the package also includes allowances for rides on public buses and trains, as well as subsidised utility bills.

Under the aid package, the government transfers 200-300 baht a month to each welfare smartcard. Recipients earning less than 30,000 baht a year get a monthly allowance of 300 baht, while those with annual earnings of 30,000-100,000 baht receive 200 baht to buy discounted goods at the shops and other designated stores.

Each cardholder also receives 1,500 baht a month to subsidise transport and 500 baht for inter-provincial public buses, third-class trains and local public buses and electric trains.

The government has offered subsidies to participating shops for electronic data capture (EDC) machine installation. Mr Whichai said there are 36,366 shops with EDC machines installed.

The cabinet in January approved 35.7 billion baht for the second phase of the welfare scheme, aiming to help 1 million people cross the poverty line, financing 34 projects that aim to raise the income of low-wage earners.

More than 20,000 small retail shops, food outlets, hawkers, stalls and mobile grocery stores have applied for the government's Thong Fah Pracha Rat shop project to be eligible for state-financed welfare cards. Some 7,841 shops have been approved and downloaded the Thung Ngern (Moneybag) Pracha Rat app, allowing welfare cardholders to pay via mobile phone.

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