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the list of those entitled to the subsidy. The government announced in July that it was planning to remove the​ ​top three deciles from the recipient group​ ​in a bid to cut costs.
The Rouhani administration is attempting to cut budget costs as part of an austerity plan in the face of the US sanctions exacting a heavy toll on the Iranian economy.
The “targeted Subsidies Law”, which is part of Clause 14 of the Budget Law for the 2019/2020 Persian year, aims to slice chunks of urban households from the monthly stipend offered since 2010.
When the scheme was first introduced, the monthly handouts were worth around €30 per person; however, the severe depreciation of the rial against hard currencies has slashed its value.
Many families have removed themselves from the list of those entitled to the payments, but, particularly in the more rurally deprived areas, many Iranians continue to apply annually to stay in the scheme.
In 2016, the Iranian ​government paid out a whopping​ ​IRR137tn ($3.87bn at the unofficial rate) in cash subsidies under the programme in the first four months of the 2016/2017 Iranian year (March 21–July 21).
It was at that time that Rouhani administration officials started taking people off the list of recipients. Businesspeople earning more than $10,000 annually were among those initially targeted, along with MPs, high-ranking government officials, dentists, doctors and retired army generals on pensions exceeding a certain amount.
The severe devaluation of the Iranian rial over the past two years, by more than 50%, cut the overall subsidies bill for the government.
According to Iran’s budget for this year, one third of the government’s income, or 1,425 trillion rials ($33.9 billion), should come from oil and gas exports.
The budget was based on a forecast crude oil price of $50-$54 per barrel and a US dollar rate of 57,000 rials, meaning the Iranian economy could remain sustainable if exports came to at least 1.5 million bpd.
EU officials also estimate Iran needs to sell 1.5 million bpd to keep its economy afloat. A drop below 1 million bpd could bring hardship and economic crisis.
23​ IRAN Country Report April 2020 www.intellinews.com