The government's planned 100-billion-baht scheme to ease low-income earners' financial burden will focus on job creation but inevitably include cash handouts, says Finance Minister Sommai Phasee.
"The measures will be aimed at enhancing job creation related to state spending on public utilities such as road construction and water management nationwide," he said yesterday. "But it is impossible to shun providing cash giveaways, as this will help to support farmers."
Besides improving job creation in the agricultural sector, the plan will target the unemployed in non-farm sectors in order to boost consumer purchasing power, Mr Sommai said.
He insisted the government would shy away from populist policies, although cash injections into existing funds for local villages remained active.
"The policy should be implemented during the dry season, and it will be put forward for government consideration in three or four weeks," Mr Sommai said.
Easing the financial burden of low-income earners amid a fragile economic rebound and sagging farm prices is high on the government's agenda.
Among the efforts to help the poor is providing nanofinancing licenses to discourage the use of loan sharks and widen opportunities to access formal financial sources.
Even though the present government has tried to avoid populist policies, which have been blamed for causing polarisation among people, critics say several projects introduced by the government such as cash handouts to rice and rubber farmers could fairly be described as pork-barrel politics.
Effects on the economy from the budget disbursement for fiscal 2015, which began last Oct 1, have accelerated, and the government has been trying to speed up expenditure by tambon and provincial administrative organisations.
Separately, Mr Sommai said the current economic conditions were conducive to a rate cut, given low inflationary pressure and a slower credit growth cycle caused by tightened bank loan approvals.
Even so, he said he would not pressure the Bank of Thailand to lower the policy rate.
The stronger baht against other regional peers could moderately affect Thai exports' competitiveness, but the central bank is taking a cautious approach to maintain the exchange rate, Mr Sommai said.
The Bank of Thailand's Monetary Policy Committee on Wednesday voted 5:2 to stand pat at 2%, saying a rate cut would be a last resort to curb the expected flood of offshore fund flows.
But economists are increasingly betting the panel will cut the benchmark rate in March to buffer against growing downside risk from an uncertain global economy and possible delays in promised infrastructure projects.