Sara Cash Aid: Helps Cover Monthly Expenses, Reduce Effect Of Inflation

KUALA LUMPUR, Jan 26  (Bernama) -- What’s the value of RM100', for some, the amount does not mean much. Still, for those in the B40 group, RM100 is a lot, especially in making ends meet with the current high cost of living.

Single mother Norfizah Abu Samah, 56, felt a huge relief with the government’s announcement on the increase in the payment rate of the Sumbangan Asas Rahmah (SARA) cash aid for poor and hardcore poor households to RM1,200 with recipients to receive RM100 every month for a year.

The cash aid, she said, not only helped her with the household expenses but also in looking after her 98-year-old mother.

"I am very satisfied because with the money I can buy rice, cooking oil, sugar, milk and biscuits, and if there is some extra money left, to buy laundry soap," said the woman who allocates between RM250 to RM300 a month for household needs.

The increase in the SARA payment rate, from RM600 previously, is a clear commitment of the Prime Minister to dealing with the wealth gap and building an inclusive society.

A senior lecturer at the Faculty of Business and Economics, Universiti Malaya (UM), Dr Roza Hazli Zakaria said the increase of RM600 can increase the purchasing power of low-income households and reduce social problems caused by poverty.

"The additional income will be spent to buy necessities which they may not afford without this aid and this indirectly increases the purchasing power of the people.

"In the context of low-income households, the increase in the cost of living will put pressure on them, and this can also cause many social problems such as school dropouts, lack of nutritious food for children, domestic conflicts, and even the possibility of an increase in crime rate,” she said.

Roza, however, thinks that cash assistance is not a sustainable solution for the long term.

“Improving the ability of the group to improve their standard of living without relying solely on cash assistance is very necessary. There is no denying that cash assistance helps low-income people meet their needs, but this kind of assistance is not sustainable in the long term, especially for the government's fiscal position.

"Therefore, the low-income group also need to be helped to generate income, for example in terms of training and capital, product marketing assistance and so on," she said.

However, an economic analyst at the Putra Business School, Universiti Putra Malaysia,  Associate Prof Dr Ahmed Razman Abd Latiff sees more targeted SARA assistance will help the government to reduce its spending and implement more initiatives to help the people.

 "When the subsidy switches to targeted subsidies, the government gets savings and those savings can be used to help more people. This (SARA) follows the practice of developed countries such as the United States and the United Kingdom which prioritise cash aid or vouchers to their people and subsidies only to industry players," he said.

The implementation of the SARA  targeted subsidy programme, carried out in stages beginning last Jan 22, involved an allocation of RM700 million, which is an increase of more than five-fold from RM130 million last year.

The much larger allocation also enabled the government to increase the number of Sara recipients to 700,000, compared to 210,000 last year, said Federation of Malaysian Consumer Associations (FOMCA) chief executive officer Dr T. Saravanan.

Describing the move as appropriate, he said, many people are affected by the increase in living costs.

 "The recipients will have an extra RM100 to spend … this will be a relief knowing that there is at least some extra money to cover their food costs.

"This aid is also expected to help the recipients reduce the effects of inflation and ease their burden in supporting their families, especially for individuals who have many small children," he said.

The implementation of this year's SARA began in stages last Jan 22 for recipients in the peninsular, while the distribution for recipients from Sabah, Sarawak and Labuan will begin on Feb 19.

-- BERNAMA