The country’s first Nagad Digital Bank considers the proposal to include the social safety net programmes in the government’s sectoral priority list for upcoming budget for fiscal year 2024-2025 and increase the number of beneficiaries and allowances under it as a positive aspect of the budget.
The institution has also suggested that the government make its strong stance on promoting cashless transactions clear in the next budget, according to a press release.
In the announced budget for FY2024-25 Finance Minister Abul Hassan Mahmood Ali proposed an allocation of BDT 1,36,026 crore for social safety net programmes, up from BDT 1,26,272 crore in FY24.
According to the proposed budget presented in the national parliament on Thursday, the finance minister proposed bringing an additional 9,81,061 individuals under the social safety programmes in the next fiscal year. Currently, the government provides allowances to 1,29,000 underprivileged individuals under various social protection programmes.
In the next financial year, the number of disability allowance recipients will be increased from the current 29 lac to 32,34,000 as proposed in the upcoming budget. Moreover, there is a proposal to increase the number of maternity allowance beneficiaries by 150,480 from the current 1,504,800. There is also a proposal to include an additional 2 lac elderly allowance beneficiaries with the current 58,01,000. Additionally, the number of widows and deserted women receiving allowances will be increased by 2 lac to a total of 25,75,000, along with an increase of approximately 97,000 in the number of beneficiaries among the Bedes, Hijras, and socially backward communities.
Nagad believes that the initiative to increase the number of allowances and beneficiaries will significantly help Bangladesh develop as a welfare state. Since the disbursements of these allowances are done digitally, this process will greatly promote cashless transactions.
The announced budget contains several positive aspects aimed at building a cashless and smart Bangladesh, making the upcoming budget generally positive. However, since becoming a developed nation requires rapid progress, Nagad believes that more issues need to be incorporated into the next budget.
To popularise cashless transactions, the government should provide some encouragement to entrepreneurs, which is missing in the proposed budget. However, Nagad believes there is still an opportunity for the finance minister to address this issue before the next fiscal year’s budget is passed.
Nagad Ltd.’s Founder and CEO Tanvir A Mishuk said to achieve the goal of making 30 percent of the country’s total transactions cashless by 2025, 75 percent by 2027, or to make the country fully cashless by 2031, digital banks will play a key role. So, he thinks digital banks need to be given some tax benefits to accelerate this initiative.
Referring to digital banks in the proposed budget, Finance Minister Abul Hassan Mahmood Ali said, “A credit scoring system utilizing artificial intelligence and machine learning technology will be introduced to facilitate loan services from digital banks. As a result, it will be possible to identify fake and anonymous borrowers very easily and the loan processing will be much easier for the genuine borrowers.”