Iran: Monthly Cash Subsidies to Continue

Monthly payments of cash subsidies will remain in place during the next fiscal year (March 2018-19) until a formula is devised to remove high-income earners from the list of recipients, the government spokesman said.

“The government is not allowed to search the pockets of 80 million people to end monthly payments. Therefore, cash subsidies payment will not be changed,” Mohammad Baqer Nobakht, who also serves as the head of Management and Planning Organization, said in a tweet.

Nobakht’s announcement came in reference to a decision made earlier by the Majlis Joint Commission, allowing the government to monitor individuals’ financial transactions to identify high earners and remove them from the cash subsidies program.

The commission is a parliamentary body responsible for reviewing the budget bill as well as the five-year economic development plans proposed by the government before its final ratification.

Following revisions introduced by the commission late last week, the budget allocated to cash subsidy payments in the next fiscal year (starting March 21) increased by 70 trillion rials ($1.52 billion) to reach 300 trillion rials ($6.52 billion) while the ceiling set for revenues from the Subsidy Reform Plan was raised to 440 trillion rials ($9.56 billion) from the previous 370 trillion rials ($8.04 billion).

As part of the Subsidy Reform Plan, the previous government removed food and energy subsidies in 2010 and paid 455,000 rials ($9.8) to each and every Iranian on a monthly basis. The controversial plan has been retained by the administration of President Hassan Rouhani.