Finance Ministry mulls details of cash handouts
Scale of relief limited without lockdown
Cash handouts to ease the burden from the Covid-19 outbreak remain an option, but details are being deliberated regarding the number of eligible people and assistance level, says a Finance Ministry source.
The ministry is considering at least four approaches to mitigate individuals' financial burden, said the source who requested anonymity.
While not disclosing the details of the approaches, the source said the scale of financial relief will be limited as the government has not imposed a nationwide lockdown to manage the latest outbreak.
One of the existing measures Finance Minister Arkhom Termpittayapaisith favours is the co-payment scheme because it helps to stimulate the economy. A cash handout has to be distributed unilaterally by the government, said the source.
The co-payment scheme allows registered individuals who make purchases at small shops to pay only half the price, with the government subsidising the other 50% of the receipt.
As the pandemic started to take a toll on the economy in early 2020, the government responded with strict lockdown measures, put in place for several months in an effort to curb the outbreak. The government also offered a 5,000-baht transfer of money to workers employed in the informal sector.
The monthly stipend ran for three months, from April to June, and was provided to temporary workers, contract employees and self-employed workers who are not covered by the Social Security Fund's Section 33.
It was reported on Sept 11 that 79.5 billion baht of the funds had been transferred, reaching 15.3 million recipients. However, about 56,000 subscribers had not received their funds before the Finance Ministry brought the money transfer process to a close on Sept 30.
Patricia Mongkhonvanit, director-general of the Public Debt Management Office (PDMO), confirmed the government has sufficient fiscal budget to mitigate the effects of the economic slowdown, using the 1-trillion-baht emergency loan decree. Of the 1 trillion baht, 555 billion was allocated for remedy measures for the public and the leftover amount from this portion is 470 billion, said Mrs Patricia.
PDMO has a standby loan credit with financial institutions to seek loans domestically, which can be disbursed within 2-3 days. But if the loan value is in the hundreds of billions of baht, the process will take some time to finish.
Based on the PDMO's assessment, the public debt-to-GDP ratio will climb to 57%, from 50.5% as of Nov 30, once the 1-trillion-baht loan decree is fully used. However, the public debt ratio also depends on GDP growth as GDP is the denominator, she said.
Of total public debt worth 7.9 trillion baht, 40% is a direct liability of the government, while the rest is state-owned enterprises' liability, with the central bank responsible for debts of the Financial Institutions Development Fund, said Mrs Patricia.