B500bn Covid borrowing bill takes effect

B500bn Covid borrowing bill takes effect

Amount trimmed by B200bn from what was approved by cabinet last week

A tuktuk driver waits for customers near Pak Klong Talat fresh flower market in Bangkok on Tuesday, the second day the market was closed by a City Hall order in the wake of Covid-19. (Photo by Chanat Katanyu)
A tuktuk driver waits for customers near Pak Klong Talat fresh flower market in Bangkok on Tuesday, the second day the market was closed by a City Hall order in the wake of Covid-19. (Photo by Chanat Katanyu)

An executive decree allowing the government to borrow up to 500 billion baht to fight Covid-19 has come into effect.

The law, signed by His Majesty the King on Thursday, was published in the Royal Gazette on Tuesday. It came into effect on the same day.

Last Tuesday, the cabinet approved the bill, which had been tabled as an off-agenda item, drawing much criticism.

It allows the government to issue bonds or borrow in baht or foreign currencies for a combined amount up to 500 billion baht. Such borrowings must be committed by Sept 30 next year.

Of the total, 60%, or 300 billion baht, will be used to help or compensate affected people and business operators.

Another 170 billion baht (34%) is for plans or projects aimed at enabling business operators to retain employees and stimulating investment and consumption.

The remaining 30 billion baht (6%)  will be used to stop the spread of Covid-19 such as buying medical equipment and vaccines, supporting local research and development and improving medical faciltiies for Covid patients.

The borrowings were scaled down from 700 billion baht the government had planned earlier. Back then, it sought to borrow 400 billion baht for remedies, 270 billion for economic rehabilitation and 30 billion for medical facilities and services.

The decree was the second passed to deal with Covid-19 after the 1-trillion-baht borrowing decree last year. 

It came into effect a day after a former finance minister challenged its constitutionality.

Thirachai Phuvanatnaranubala, who served six months during a Yingluck Shinawatra government, filed a petition with the Central Administrative Court on Monday, asking it to revoke the May 18 cabinet resolution.

Among the issues he raised was the fact that the decree had been added as an off-agenda item and no officials had since come forward with explanations why it had to be presented that way.

He feared it would end up like the 1-trillion-baht decree issued by this government last year under which a special committee was set up to have sole power in screening, approving, monitoring and regulating projects.

In the past, previous governments simply outlined the scope of spending in such bills, automatically putting them under the scrutiny of the 2018 State Fiscal and Financial Disciplines Act, Mr Thirachai claimed.



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