Officials at Odds Over Shortlisting Cash Subsidy Recipients

EghtesadOnline: First Vice President Es’haq Jahangiri communicated on June 27 the bylaw on the implementation of Clause 14 of the Budget Law for March 2018-19 concerning the Targeted Subsidies Law to organizations affiliated to the executive branch.

News ID: ۷۸۳۱۲۲

01 July 2018

As per the Targeted Subsidies Law of 2010, subsidies on food and energy were removed and instead 455,000 rials ($10.8) were paid to each and every Iranian on a monthly basis.

The plan has been retained so far and nearly 76 million or 95.21% of Iranians currently receive the monthly grant of cash subsidies, Mehr News Agency reported.

The expenditure section of Targeted Subsidies Law allows the payment of 415,000 billion rials ($9.88 billion) to monthly cash subsidies, up to 70,000 billion rials ($1.66 billion) in cash payments to reduce absolute poverty, 37,000 billion rials ($880.95 million) to healthcare and up to 33,000 billion rials ($785.71 million) for the Guaranteed Purchase of Wheat program and bread subsidy, according to Financial Tribune.

According to the law, executive organizations, including State Organization for Registration of Deeds and Properties, Industries Ministry, the Law Enforcement Force, the Central Insurance of Iran, the Economy Ministry, National Organization for Civil Registration, Administrative and State Recruitment Organization, Telecommunications Company of Iran and mobile network operators, Iran Post Company, the Central Bank of Iran, and the National Tax Administration Organization Of Iran are required to compile data needed by the Ministry of Cooperatives, Labor and Welfare to identify and categorize households based on their income and remove the high-income households that fall within the top three income deciles.

This comes as, two days after the bylaw was issued on Friday, the head of Plan and Budget Organization, Mohammad Baqer Nobakht, tweeted that “despite the economic strain monthly [cash payments puts on the government], the program will continue through this year (March 2018-19)”.

“As we announced earlier, the removal of top three income deciles from the list of cash subsidy recipients is not practically possible. Payments will continue. Stop making people anxious,” his tweet read.

In February and the midst of budget debates in the parliament, Nobakht, who also serves as the government spokesman, said the monthly payments would remain in place during this fiscal year until a formula was devised to remove high-income earners from the list of recipients.

“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,” he said.

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