Condition of Social Security

Growth of credit to the private sector

The country has made a substantial progress in reducing poverty over the last few decades, yet the rate of decrease has slowed down in the recent years. Thus the number of population living under the poverty line is still increasing. The rate of decline in poverty in Bangladesh has slowed down in recent years. Poverty reduced by 8.9 percentage points during the five years of 2000-2005 while during the next five years (2005-2010), the total decline was 8.5 percentage points. The slower rate of poverty reduction is the result of inequality, low public expenditure in the recent years, and increased trend of unemployment, rural urban differentials and a tendency of increased non-development expenditure over development expenditure.

The main tool that the government uses for a social security purpose for the poor is the provision of Social Safety Net Programmes (SSNPs). These SSNPs are mainly delivered on an ad-hoc basis to cope with sudden vulnerabilities. It is observed that reasonable growth rates have led to declines in the percentage of poor but actual numbers of the poor have not declined while expenditures on safety nets have fallen at the same time. Though safety net programmes are important components of the social protection strategy, expenditure on the programmes is fairly low.

The proposed budgetary allocation for the reduction of poverty and social security and welfare in current fiscal year is Tk. 115237 crore and Tk. 12366 crore respectively. Based upon historical track record, in most of the cases, the proposed budgetary allocation has witnessed a negative revision. By calculating weighted mean, it might be said that the proposed allocation for social security and welfare would be approximately Tk. 12268 crore as revised allocation. The current budget shows an expenditure of 51.79 percent in relation to poverty reduction. This allocation as a percentage of total budget is lower than that of the previous year (FY 2012-13) which was 52.68 percent (Bangladesh Economic Update, December 2013, Unnayan Onneshan).

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