The two phases of the co-payment scheme are projected to increase GDP by 0.32 percentage points, causing spending worth 105 billion baht to be injected into the economy.
The cabinet on Tuesday approved a 43.13-billion-baht budget to stimulate the economy through extension of the co-payment scheme, which subsidises 50% of food and goods purchased at small shops, and the state-sponsored welfare card programme for low-income earners.
Of the 43.13 billion baht, 22.5 billion is to be allocated for the second-phase co-payment scheme, and 20.6 billion for the state welfare card programme.
The second-phase co-payment scheme will use funds allocated from the 400-billion-baht sum designated for economic and social rehabilitation under the 1-trillion-baht emergency loan decree.
For the welfare card programme, it will use funds from the 500 billion baht in loans allocated to help people affected by the pandemic. The 500-baht monthly financial assistance will be given to 13.75 million low-income earners who have state welfare cards during the first three months of 2021.
Government spokesman Anucha Burapachaisri said the Finance Ministry estimated the two phases of the co-payment scheme could provide a gain of 0.32 percentage points to GDP, with 105 billion baht of revolving money.
The government allocated 30 billion baht for the first phase of co-payment.
Under the first phase, the government pays for 50% of food, drink and general goods purchases for up to 150 baht per person per day, capped at 3,000 baht per person for the duration of the scheme.
An estimated 60 billion baht is expected to be pumped into the economy through the scheme, according to the Fiscal Policy Office.
The first-phase scheme started on Oct 23 and ends on Dec 31.
The objective is to stimulate consumer spending in the final quarter after sentiment was gutted by the pandemic.
Mr Anucha said the second-phase co-payment scheme covers an additional 5 million people, with the amount of subsidies raised from 3,000 to 3,500 baht per person. The Finance Ministry plans to allow people to register for the scheme on Dec 16. The existing 10 million people who have already registered with the first-phase scheme will be eligible for an additional 500 baht.
The second-phase co-payment scheme will be implemented between January and March 2021. The scheme also extends the rights of existing registered users to March next year.