Government of Masoud Beheshtian's Move to Eliminate Cash Subsidies for Certain Income Groups

The spokesperson for the government of Masoud Beheshtian announced the necessity of 'redefining income groups' to 'identify individuals with high financial capacity' for the purpose of eliminating their cash subsidies. Fatemeh Mohajerani stated on Saturday, January 15, in a note published in the state newspaper 'Iran' that economic and social indicators have changed, and the financial capacity of individuals in society cannot be measured by indicators from a decade ago. The government's expectation to redefine the indicators and remove more individuals from the list of subsidy recipients comes at a time when, over the past decade, not only has the livelihood and financial capability of the people not improved, but official statistics also indicate a significant portion of the population has fallen into poverty. Mohajerani mentioned that government resources are limited and that the cash subsidy mechanism was established to support the community: 'Based on these two realities, it is necessary to provide as much support as possible to the most vulnerable sections of society. This perspective differs from the approach of providing equal subsidies to the entire community.' The 30% poverty rate has been stabilized; one-third of Iranians are deprived of meeting their needs. The government spokesperson, without addressing the increasing poverty in the country and the fall of at least one-third of the population into absolute poverty, stated that 'no government can claim it can completely eliminate poverty.' Meanwhile, Hassan Nourouzi, the head of the Targeted Subsidy Organization, stated on January 10 that subsidies for the 8th to 10th income groups will be eliminated. The significant drop in cash subsidy resources in the next year's budget indicates that a broader section of income groups will likely be removed from the subsidy recipient list. The government has allocated 315 trillion tomans (equivalent to less than half of this year's budget) for cash subsidies in the next solar year. Previously, the spokesperson for the Targeted Subsidy Organization reported a 75 trillion toman deficit in the subsidy budget in the first half of this year, and the Tasnim news agency reported that the government borrowed more than 80 trillion tomans in the first five months of the year to pay cash subsidies. Last year, the government's subsidy budget was about 740 trillion tomans, but only 491 trillion tomans were paid from the resources allocated in the budget law. Additionally, last year, the government did not pay 125 trillion tomans of its subsidy commitments, including part of the health subsidy, and financed the subsidy budget almost to the same extent through borrowing.