The introduction of a partial universal basic income programme at the national level could reduce poverty by 6.13 per cent, with rural areas benefiting the most with an 8.14-per cent poverty reduction, compared with a 1.85-per cent decrease in urban areas, according to a study.
The study 鈥楢ssessing the viability of universal basic income in Bangladesh: target population, fiscal requirements, and institutional challenges鈥� conducted by the Centre for Policy Dialogue, observed that the basic income programme has the potential to address the country鈥檚 socioeconomic challenges.
CPD senior research fellow Towfiqul Islam Khan on Sunday presented the study findings at a dialogue held at the Lakeshore Hotel in the capital Dhaka.
The study also said that despite declining poverty levels in Bangladesh, rising inequality persisted, and the universal basic income could be a promising tool to address these issues by reducing poverty, empowering citizens and improving social protection efficiency.
The study estimated that implementing a partial basic income programme in the national level for 147.25 lakh households below the poverty scorecard threshold would require Tk聽80,219.60 crore.
However, savings from existing programmes benefiting these households, amounting to Tk聽4,826.63 crore, would reduce the net fiscal requirement to Tk聽75,392.98 crore, it showed.
The study has introduced poverty scorecard threshold as a measure to identify households vulnerable to poverty in Bangladesh.
Households scoring below the threshold are deemed more susceptible to poverty, while those scoring above are considered less vulnerable.
This threshold is calibrated separately for urban and rural areas, aligning with the upper poverty line defined by the Household Income and Expenditure Survey 2022.
According to the study, for urban households, a score below 48 indicates vulnerabilities, with 36.44 per cent of urban households falling below both the upper poverty line and the scorecard threshold.
In rural areas, the threshold is set at 52, capturing 68.61 per cent of households that overlap with the upper poverty line.
Across the country, 88 per cent of households reported per capita consumption expenditure below Tk聽8,000, highlighting widespread economic constraints.
The study has set the national poverty line at Tk聽3,847, with a monthly household allocation of Tk聽4,540, or 25 per cent of the total basic needs cost for an average household size of four, amounting to Tk聽54,480 annually.
The study divided the intervention areas into four clusters.
The cluster-1 targets 64 districts where 35.90 per cent of households falls below the threshold, the cluster-2 focuses on 36 poverty-prone districts with a poverty rate above 24.3 per cent, the cluster-3 addresses 34 climate-vulnerable districts, and the cluster-4 targets 11 highly poverty-prone districts with a poverty rate above 40 per cent.
The CPD study focused on three key areas 鈥� developing a tailored universal basic income concept for Bangladesh, assessing its scope by considering broader social factors, and creating a feasible model for UBI implementation to guide future social protection reforms.
While the proposed model presents challenges, such as limited fiscal capacity and high administrative costs, it suggested a gradual scaling-up approach, leveraging donor support and innovative taxation to address resource constraints and ensure financial sustainability.
The CPD said that the political economy of implementing UBI required careful consideration of who stood to gain or lose.
Securing political support is challenging, as leaders may be concerned about fund distribution across districts, and local leaders might try to exert discretionary power, it said.
鈥業 believe the concept of universal basic income is of great importance, but it is crucial to remember that it is not the only option,鈥� CPD chair Rehman Sobhan said.
The economist said that there were four potential options that should have been considered, each evaluated for both its operational viability and the financial capabilities of the government.
鈥楬owever, one critical factor that must be addressed, and I am not sure if this has been fully accounted for in the details of the paper, is the political economy of implementing such a programme,鈥� Rehman Sobhan said.
He said that historically, all programmes involving income transfers through various social protection schemes had been influenced by the political environment in which they were implemented.
鈥業ssues of both exclusion and inclusion have been major challenges in the delivery of these programmes. Public expenditure, particularly in the case of well-targeted programmes, has often been patronage-oriented and used as a political tool by the government in power to influence distribution and target specific groups,鈥� he mentioned.
Regardless of the portfolio one might adopt, this issue remains pertinent for any future government, as past administrations have consistently used transfer programmes to enhance their political appeal to different constituencies, the economist said.
鈥榃e have discussed numerous challenges related to delivering such a model, including political, institutional, and fiscal issues, among others. But I approach it from a rights-based perspective,鈥� CPD distinguished fellow Debapriya Bhattacharya said.
He said that it was possible to include the concept of UBI in the budget for the financial year 2025-26.
Debapriya also said that social initiatives and political will could ensure citizens鈥� rights to securing a minimum income.
KAS Murshid, chair of the taskforce on re-strategising the economy and mobilising resources for equitable and sustainable development, said that the performance in eliminating errors of targeting and inclusion of beneficiary in the existing social safety net programmes had not improved rather it had declined.
So there is scope for reconsidering the implementation of basic income programme, he said.
Murshid suggested that the focus should not only be on the poor, but also on identifying the vulnerable population for the programme.
Bangladesh Nationalist Party standing committee member Amir Khosru Mahmud Chowdhury said that good governance, a prudent delivery system and political will were crucial to implementing the UBI.
He also said that increasing tax-GDP ratio was important to implement the basic income programme.
CPD distinguished fellow Mustafizur Rahman presided over the programme while Ganosamhati Andolan chief coordinator Zonayed Saki, White Paper Committee member Imran Matin, World Bank鈥檚 senior social protection economist Aneeka Rahman and Delegation of the European Union to Bangladesh social protection programme manager Iole Valentina LUCCHESE, among others, spoke at the event.