He said funding for the project would come from the fiscal 2024 budget, with a decrease in funding for certain programmes, and through borrowing from state-owned financial institutions under Section 28 of the State Fiscal and Financial Discipline Act of 2018.
Section 28 allows the government to order state-owned financial institutions to fund projects that improve the public’s quality of life or rehabilitate the economy.
The government sets a budget to repay these financial institutions every year, reports the Bangkok Post.
The Financial and Fiscal Policy Committee set a ceiling rate for these state banks to fund state projects under Section 28 at 32% of the government’s annual total expenditure.
As of June, the remaining amount that could be borrowed was B18 billion in fiscal 2023.
However, Mr Kritsada said in fiscal 2024, the Finance Ministry expects budget spending under Section 28 of around B100bn.
Part of the budget would come from the repayment of loans to state-owned financial institutions, as well as the unused budget from some discontinued projects under Section 28.
Furthermore, he said an estimated increase in the price of agricultural products will mean less use of subsidies under Section 28, resulting in a higher credit limit in addition to the remaining credit of B18bn for this fiscal year.
The government is in talks with the Bank of Thailand and other relevant agencies regarding the form of the handout.
The regulator initially proposed digital baht or Central Bank Digital Currency, the form of which is yet to be finalised.
Mr Kritsada said implementation of the digital handout scheme will not affect the central bank’s monetary policy.
He said the project should contribute to GDP growth in 2024, with the extent of the contribution dependent on the economic multiplier effect, which is currently being studied.
GDP is projected to grow by 2.8% this year, according to the National Economic and Social Development Council.
Payong Srivanich, chairman of the Thai Bankers’ Association, said after a meeting of the Joint Standing Committee on Commerce, Industry and Banking on Thursday (Sept 7) the private sector is waiting for the government’s announcement on the B10,000 digital handout scheme.
The Pheu Thai-led coalition government plans to distribute a one-time cash transfer using blockchain technology, but some pundits favour using the existing Paotang mobile app.
Krungthai Bank (KTB), the country’s largest state-owned commercial bank, developed the Paotang app to support cash handout and stimulus policies for the former government, which were used widely during the pandemic.
Mr Payong said KTB is also awaiting an announcement on the scheme and had no comment on the issue.
The Bank of Thailand is also waiting for further details about the handout scheme and other key financial policies before commenting on safety and compliance issues, as well as making an economic forecast for 2024.