Prime Minister Srettha Thavisin on Monday reiterated his confidence the government is moving in the right direction with the 500-billion-baht digital wallet handout scheme.
Addressing criticism the policy will require a massive budget and could lead people to become more reliant on government handouts, he said the policy was a one-time initiative designed to inject funds into everyone's pockets.
He said the terms and conditions for spending the handout were different from those of previous handout schemes including those implemented during the Covid-19 pandemic.
Recipients of the digital wallet scheme are required to spend the money in their localities, which is intended to stimulate the sluggish economy in the provinces.
"I've explained it multiple times. I am confident we're heading in the right direction," he said.
With the scheme set for rollout in the last quarter of this year, Mr Srettha said the government expects it to bear fruit in the first or second quarter of next year while the tourism promotion policy will remain the core policy to stimulate economic activities in the final quarter of this year.
The prime minister gave assurances the handout scheme will not be delayed further and it will be carried out transparently.
Some critics have raised concerns that the government's plan to borrow money from the Bank for Agriculture and Agricultural Cooperatives’ (BAAC) could face problems.
The digital wallet scheme will be financed through three funding sources: 152.7 billion baht from the budget for the 2025 fiscal year; 175 billion baht reallocated from the current fiscal year's budget; and another 172.3 billion baht to be borrowed from the BAAC to be given to 17.23 million farmers.
Critics are calling on the government to provide details regarding how it will repay the bank.
Economist Anusorn Thamjai on Monday issued a "five-point caution" to the government regarding its plan to borrow from the BAAC. Among them is that the government should devise a repayment and compensation plan in which 40-50 billion baht should be allocated to the BAAC per year, to prevent potential financial issues affecting the bank.
The economist said borrowing from the BAAC to partially finance the scheme falls under Section 28 of the State Fiscal and Financial Disciplines Act. The government may revise the debt ceiling to 35% under the law if it needs off-budget funds to address economic problems.
The borrowed amount is initially classified as "off-budget" and not immediate public debt. However, the borrowed amount could become public debt if future revenue cannot be raised to cover it, he said.
"As the borrowed amount is initially classified as 'off-budget' and not immediate public debt, the estimated public debt could be lower than it is.
"However, if the scheme follows the five-point caution along with risk management and good governance, it can achieve its objectives without increasing fiscal risks in the future," he said.