Iranian Parliament Announces Major Shift from Cash Subsidies to Electronic Commodity Coupons
In a significant move to reform its social welfare system, the Iranian government, under the direction of Parliament Speaker Mohammad Bagher Ghalibaf, is advancing a major overhaul of its subsidy program, transitioning from direct cash payments to a targeted electronic commodity coupon system.
A Push for Economic Justice and Efficiency
The proposed “Electronic Coupon” plan is framed by officials as a crucial step toward achieving greater economic justice and streamlining the distribution of state subsidies. Parliament Speaker Ghalibaf has emphasized that the Ministry of Welfare is mandated to allocate credits for this new system, moving decisively away from the previous cash model. Proponents of the reform argue that it will enhance transparency, reduce potential corruption in the subsidy distribution network, and ensure that government aid directly provides for essential goods.
Addressing Public Concerns and Implementation Hurdles
The announcement has sparked widespread public discussion, with a primary focus on the plan’s impact on low-income households. Acknowledging that many families rely heavily on cash subsidies for their basic needs, officials have stressed that the new system is designed to better support the most vulnerable segments of society. The government’s approach involves reallocating resources by ceasing cash subsidies for higher-income deciles (8 to 10) and channeling those funds toward the commodity coupons for the seven lower-income deciles.
To address concerns over implementation, authorities have confirmed that no in-person registration is required for the program. Enrollment and distribution will be automated based on existing data, ensuring a seamless transition for eligible citizens.
Funding and the Path Forward
A substantial credit of 178 trillion tomans, approved by the heads of the three branches of government, has been allocated to ensure the continuity and expansion of the commodity coupon scheme. This financial backing is intended to cover the fourth phase of the program.
According to the Minister of Cooperation, the cutoff of cash subsidies for upper-income deciles is scheduled for the Iranian month of Shahrivar (late August/early September). The resources freed by this measure are expected to facilitate the subsequent disbursement of the next round of commodity coupons, either simultaneously or shortly thereafter.
The previous phase, which began in late June 2024, provided substantial support:
- Deciles 1 to 3: 500,000 tomans in credit for essential goods.
- Deciles 4 to 7: 350,000 tomans in credit.
The government has indicated that the credit from the previous phase remains valid until the end of Mordad (mid-August), with a possibility of extension into Shahrivar, ensuring no gap in support for beneficiaries during the transition.
This structural shift represents a focused effort to optimize Iran’s social safety net, aiming to directly provide for citizens’ essential needs while promoting fiscal responsibility and equitable resource distribution.
