Prime Minister Srettha Thavisin’s administration has embarked on an ambitious plan to provide financial support to millions of Thais through a digital wallet initiative. This initiative diverges from previous plans of borrowing, and will instead be financed through the country’s budget expenditures. The aim is to disburse 10,000 baht to each of approximately 50 million citizens, requiring a total outlay of about 500 billion baht.
The financing plan consists of three main components: Firstly, the upcoming fiscal year’s budget will contribute 153 billion baht to the scheme. Secondly, 172 billion baht will be taken from the Bank for Agriculture and Agricultural Cooperatives (BAAC), to be reimbursed later under Section 28 of the State Fiscal and Financial Discipline Act. This act permits state agencies to front the costs for government projects, with the obligation of being compensated by the government at a future date. Lastly, budget management strategies of the fiscal 2024 budget will allocate another 175 billion baht, some of which will also come from central funds.
One of the core questions surrounding this strategy is the classification of the expenditure. The funds provided under Section 28 are considered “quasi-fiscal” and do not count as public debt, though they do create a future fiscal responsibility for the state. To comply legally, any state agency involvement must be within their legal mandate, aiming at economic rejuvenation, improving livelihoods, or enhancing public life.
Whether the BAAC can legally support the digital wallet initiative under its mandate is a topic of active legal scrutiny. To pursue clarity and alignment with the BAAC’s objectives, the government has sought the Council of State’s guidance on the matter. The database of the BAAC, as it stands, already holds debts assigned by the government of about 600 billion baht, building upon its substantial engagement in similar socio-economic support endeavors.
This digital wallet scheme is positioned to stimulate the economy by enhancing liquidity and providing much-needed relief across various demographic sectors, which, in accordance with the government, aligns with the purpose of the BAAC to foster development and support in rural areas.
Key Questions and Answers:
– How will the distribution of funds through the national digital wallet be managed?
The distribution of funds is likely to be managed through an electronic platform that individuals can access using their mobile devices or computers. Typically, for such initiatives, citizens may need to register online or through a designated app, providing identification and banking details for verification purposes.
– What impact will this initiative have on Thailand’s fiscal policy and indebtedness?
While the funds under Section 28 don’t count as public debt, they still represent a future fiscal obligation. Therefore, although the immediate public debt ratios might not increase, there’s an associated long-term liability that the government will need to address.
– What are the challenges associated with the implementation of the national digital wallet initiative?
Key challenges include ensuring cybersecurity, preventing fraud, achieving widespread digital literacy, and managing the potential increase in long-term fiscal obligations.
– Is there any controversy surrounding the use of BAAC’s funds for the initiative?
Yes, there is legal scrutiny regarding whether BAAC’s participation stretches beyond its mandate. Utilizing the BAAC’s funds for the initiative raises questions about the legitimacy of such an action and whether it aligns with the BAAC’s objectives in supporting rural development.
Advantages:
– Economic stimulation: Injecting funds directly into the hands of citizens can stimulate consumption and help revive the economy.
– Inclusive support: By reaching out to millions of Thais, the initiative can provide support to those who may not have access to traditional banking services.
– Enhanced liquidity: An increase in liquidity can help individuals and businesses cope with financial challenges.
Disadvantages:
– Long-Term Fiscal Responsibility: Though not counted as immediate debt, the obligation to reimburse state agencies creates future fiscal responsibility.
– Implementation risks: There is a risk of fraud, technical challenges, and the possibility that the program may not reach the most vulnerable populations effectively.
– Legal Challenges: If it is determined that utilizing the BAAC’s funds oversteps its mandate, the initiative could face legal challenges and delays.
For further information related to Thailand’s economy and digital initiatives, you might consider exploring the official government website or relevant financial institution websites. A suggested link to the main domain of the Government of Thailand is as follows:
Government of Thailand
Please note that the specific details regarding the digital wallet initiative, such as registration process, user interface, and exact measures taken to ensure security, depend on the technical implementation and regulations set forth by the Thai government.
The source of the article is from the blog radardovalemg.com