Boosting the economy is the unavoidable task facing all governments coping with the global recession caused by Covid-19.
This does not mean that cash handout programmes should be rolled out one after the next without careful consideration over who the targeted recipients are, and what impact such handouts will have on the economy.
That is why the Prayut government should thoroughly consider the effectiveness of its latest plan to give 3,000 baht to 15 million people -- affected by the economic fallout of Covid-19 -- before implementing it.
The government has already been forced to borrow more than a trillion baht to finance measures to mitigate the impacts of the virus.
The borrowing will increase public debt to 51.8% of GDP in the current fiscal year and to almost 58% in the next fiscal year.
The burden will eventually fall on the taxpayer. This is why the government must be able to show how each and every stimulus campaign will achieve its goals, before rolling any out.
In its current shape, the 45-billion-baht cash handout remains unclear, with some aspects of the measure questionable.
The economic stimulus measure was proposed by the Finance Ministry and approved by the Centre for the Administration of the Economic Situation Affected by Covid-19 (CAESAC) last week.
The participants are required to register for the cash, which they can spend on consumer goods.
Spending will be initially capped at 100 to 250 baht per person a day. The government will pay half the price of the purchase under the scheme. The programme is expected to be launched next month and implemented until the end of the year.
One thing that the Finance Ministry emphasised about the scheme is that it is not just free cash handouts. People who take part in this measure will have to contribute from their own pockets as well. But does this co-payment make the scheme more effective?
Let's go back to look at the measure's objectives.
According to the Finance Ministry and Office of the National Economic and Social Development Council, which serves as the CAESAC's secretariat, the measure is aimed at easing the cost of living and distributing income to street vendors, hawkers and small-scale shop owners.
If 15 million people spent all the 3,000-baht handouts, the scheme would help boost domestic consumption and inject about 90 billion baht into the economy.
Now, how would co-payment make the measure more effective than the government itself simply subsidising consumer spending?
Transactions will also be made through an application. Would that be convenient for street vendors and hawkers?
More importantly, the measure is initially open for shopping malls and convenience stores to take part in.
While the participation of these stores will certainly fuel spending and expedite consumption, the question remains of whether it will do the opposite of helping small-scale entrepreneurs, street vendors and hawkers. At present, CAESAC insists the 3,000-baht cash handouts will be further modified.
With the many questions the measure has provoked, the Finance Ministry faces a tough job redefining its objectives.
It's imperative the ministry come up with a more effective, better-thought-out version before it's implemented next month.