Borrowing and increasing public debt are among the sources of funds for the 10,000 baht digital wallet handout scheme, Dr Prommin Lertsuridej, secretary-general of the prime minister's office, admitted on Friday.
He said the government has three possible ways to fund the 10,000-baht digital wallet handout which is estimated to require 560 billion baht.
The digital wallet policy committee has been assigned to explore each of these options and was told to keep fiscal discipline and the country’s credit rating in mind, he said.
The first option would be to adjust the budget spending plan for the 2024 fiscal year by cutting unnecessary spending schemes and postponing large-scale procurement programmes.
The second option would be to borrow from state agencies — with the amount estimated to be around 200-300 billion baht. If the government chooses this option, it is legally required to increase the debt ceiling. How much is needed depends on the amount of money to be borrowed.
He said the government would draw up a repayment plan and include it in the annual budget spending plan, noting that it is initially estimated about 100 billion baht will be repaid each year.
Given an annual budget expenditure of 3.3 trillion baht, he expressed confidence that the government has the ability to repay the loan.
He pointed out that when the village fund scheme was implemented, the government at that time borrowed 74 billion baht from the Government Savings Bank to fund the scheme and repaid the loan over a period of seven years.
“If we have a clear repayment plan, it won’t affect the country’s credit rating. We can find the money for repayment because we know how to manage it and it won’t affect the country’s financial standing,” he said.
The last option is to obtain other loans to fund the digital wallet scheme — but the government has yet to study this option in detail. Considering the public debt to gross domestic product (GDP) ratio at 60% currently, he said the option is feasible because the ratio is capped at 70%.
“There is room to obtain a 1.7 trillion baht loan here and if the GDP increases, there is more room to breathe,” he said.
Referring to growing criticism around the cash handout scheme, Dr Prommin said economic figures can be verified for transparency and constructive criticism is always welcomed.
He said the 10,000-baht giveaway will increase people’s purchasing power or raise capital for small-time businesses. It will drive the economy through a fiscal multiplier which will increase GDP and lower the ratio of household debts to GDP, he added.
Speaking after the meeting of the digital wallet policy committee, Deputy Minister of Finance Julapun Amornvivat said the 10,000-baht will be handed out through an application backed by blockchain technology.
He said the Government Financial Institutions Association (GFA) was asked to design the application — which in the future could be used for other state services such as healthcare.
He said businesses inside and outside the tax system can join the scheme but only those in the tax system can make cash money in the digital wallet. Those who are not registered can use the money in the digital wallet for purchases with registered shops or vendors, he added.
He said the government is ready to provide the details to the National Anti Corruption Commission (NACC) which is reportedly keeping an eye on the digital wallet scheme.
Paetongtarn Shinawatra, head of the Pheu Thai family, posted on her Facebook account that it was not a matter of if, but a matter of when the digital wallet scheme would be implemented.
She said that businesses that want to take part in the scheme are expected to be able to register by the middle of next month.
