Once the government allocates substantial funds for its flagship digital wallet handout, spending on other projects will be reduced, says finance permanent secretary Lavaron Sangsnit.
According to Mr Lavaron, the digital handout scheme, which requires a hefty budget of around 500 billion baht, is intended to stimulate the economy rather than function as a welfare measure. Therefore, the monetary injection must be significant enough to ignite a stimulus, he said.
The most immediate stimulus method is consumer spending, said Mr Lavaron.
"If the economy is allowed to continue declining, rescuing it will require an enormous amount of money," he said.
"If we can sustain the economy, utilising public spending to generate expenditure to stimulate the economy, it will require less money. However, the government must offset this by spending less on other projects because funds are limited."
The digital wallet handout is for Thais age 16 or older with an annual income not exceeding 840,000 baht.
The budget of roughly 500 billion baht is to come from three sources: leftover budget for fiscal 2024, totalling 175 billion baht; fiscal 2025 budget, tallying 152 billion; and the use of quasi-fiscal measures under Section 28 of the State Fiscal and Financial Discipline Act, amounting to 172 billion.
Use of leftover funds from the fiscal 2024 budget for the scheme would require a new law to allow a transfer.
As for funds channelled through Section 28, Mr Lavaron said this tactic must wait until the fiscal 2025 expenditure budget is approved, as fiscal 2025 commences on Oct 1, 2024.
He said the design of the digital wallet scheme specifies that spending during the first round must take place at small-scale stores within eligible districts.
Once these stores receive digital payments in the first round, they cannot convert them into cash until they use digital wallet funds they receive in the second round.
This serves as a kind of lock to ensure a multiplier effect on the economy for at least one round, said Mr Lavaron.
The provision also helps to reduce the incentive to commit fraud, he said. For example, stores might otherwise attempt to collude with consumers by offering to purchase digital money at a discount, such as exchanging 10,000 baht of digital money for 7,000 baht in cash.
Mr Lavaron said the Digital Government Agency and the Digital Economy and Society Ministry are in the process of developing a super app for this project.
The app is expected to feature a system design that would make it easier to detect irregularities, such as a disparity between a store's sales and its stock, he said.
This system design would also alert cybercrime police to facilitate more efficient inspection, said Mr Lavaron.
The definition of small-scale stores for the scheme would include convenience stores such as 7-Eleven outlets, facilitating users making digital payments.
He said because the funds used in the digital wallet scheme are not tokens, the scheme does not conflict with the Bank of Thailand's Currency Act.
On the first day of the scheme, the wallet would contain the exact amount of digital money allocated.
Government spokesman Chai Wacharonke earlier addressed allegations that the project would favour certain rich entrepreneurs or 7-Eleven stores, operated by CP All.
According to data from the Commerce Ministry, there are 14,500 7-Eleven branches nationwide, with about 7,000 of them franchised stores, he said.
"This figure is insignificant compared with the number of small-scale stores registered under the previous administration's Khon La Krueng co-payment subsidy scheme, which tallied 1.2 million," said Mr Chai.
These small-scale stores are expected to register to participate in the scheme, he said.
