Ministry taps state banks to boost rural economy

Ministry taps state banks to boost rural economy

The Finance Ministry plans to prioritise strengthening the rural economy and accelerate infrastructure investments in 2020 as a means to cushion against external headwinds.

The Finance Ministry will use state-owned banks, including Krungthai Bank (KTB), Government Savings Bank, GH Bank and the Small and Medium Enterprise Development (SME D) Bank, to boost the rural economy, said Finance Minister Uttama Savanayana.

Under the rural economy strategy, the ministry plans to enhance the farming sector to collaborate with community enterprises, Mr Uttama said.

If the external economy remains uncertain, the domestic economy will buffer the country through the economic downturn, he said.

The ministry wants to promote infrastructure investment, particularly in rail, roads and aviation. Some funding sources will be derived from the public-private partnership scheme and fund mobilisation through the Thailand Future Fund.

The ministry continues to integrate basic infrastructure related to digital technology into the rural economy after initiating the national e-payment system three years ago.

The most recent effort was the Taste-Shop-Spend scheme.

"Businessmen, especially foreigners, believe we can handle the short-term economy, but seeing whether the government will be able to drive the country's strategy is what they are interested in," Mr Uttama said.

Pushing the Eastern Economic Corridor is the government's initial focus, with the Southern Economic Corridor and social structural investment next, he said.

Investment in human resources, especially education to hone skills, is crucial in this era, while welfare for the poor is also essential.

Lavaron Sangsnit, director-general of the Fiscal Policy Office, said spending through KTB's Pao Tang G-wallet 2 app for cash rebates continues to gain ground.

From Sept 27 to Dec 17, transactions for Taste-Shop-Spend numbered 11.8 million, worth 24.8 billion baht.

Of the total, 11.6 billion baht was spent through Pao Tang G-wallet 1 and the remainder through G-wallet 2, Mr Lavaron said.

The scheme is part of the government's 316-billion-baht stimulus package aimed at triggering a spending spree and boosting the country's full-year economic growth to 2.6%.

Under the scheme, 10 million recipients in the first phase and 3 million in the second received a 1,000-baht cash handout, plus a cash rebate of up to 20%. The 1,000-baht cash giveaway is required to be spent through Pao Tang's G-wallet 1.

In the third phase, 2 million recipients received 15% cash back for spending of up to 30,000 baht at participating merchants. The rebate rises to 20% for 30,000-50,000 baht spent, with up to 8,500 baht available in cash back.

Recipients of all three phases are able to use their rights until the end of January.

He said the first cash back amounting to 384 million baht was paid on Dec 15 to 153,579 recipients who spent through G-wallet 2 during Sept 27-Nov 30.

Access to the cash rebate for 1.1 million registrants who were unable to participate in the scheme's first and second phases has been reinstated to enable them to enjoy the cash back until Jan 31, 2020.

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