Page 27 - IRANRptJul20

Iran removes more ‘non-low-income’ citizens from “Subsidies Law” cash handout scheme
once it became clear the legislature could not be convened.
The 12-member Guardian Council—made up of Islamic Law experts selected by the supreme leader of Iran and six jurists selected by the parliament from among jurists proposed by the head of the Judiciary—has 20 days to review the budget bill from March 3, according to Abbasali Kadkhodaei, its spokesman.
The draft budget as it stands does not take into account the loss of income to the state from the closure of businesses in the country caused by the coronavirus epidemic.
The Iranian government has removed another 400,000 citizens from the monthly cash-handout “Subsidies Law” scheme introduced by the Ahmadinejad administration eight years ago, ILNA reported.
The scheme pays out the equivalent of around €3.50 (at the unofficial exchange rate) to people deemed to be on low incomes to help with utility bill payments. However, there has been a lot of debate over whether many recipients cannot be objectively described as “low-income”. At the same time, the government’s budget is under severe pressure, thus officials are looking to make cuts that will not translate into substantial social pressure.
The past couple of months have seen the officials remove 1.1mn people from 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
27​ IRAN Country Report July 2020 www.intellinews.com