Iran Announces Comprehensive Review of Subsidy System to Enhance Support for Vulnerable Groups
In a significant move aimed at bolstering economic support for its citizens, Iranian economic experts are calling for a major overhaul of the nation’s subsidy mechanisms. The proposed changes focus on shifting from direct cash payments to a more targeted commodity voucher system to better address the essential needs of lower-income families.
Strengthening Market Controls and Support Mechanisms
Economic analyst Hamid Haji Ismaili emphasized the necessity for the government to enhance market regulatory mechanisms to stabilize prices. “Given the current market conditions and the daily price fluctuations we witness, the primary action the government must take for vulnerable strata, especially workers, is to control the market and elevate its price control mechanisms,” he stated during a radio interview.
He pointed out that the existing supervisory frameworks are currently ineffective at controlling and stabilizing prices, a situation that causes significant public distress. The challenge is not only the fluctuating prices of essential goods but also the multitude of major needs households face due to having children and other various circumstances.
From Cash Subsidies to Commodity Vouchers: A Necessary Shift
A central pillar of the proposed overhaul is the critical reevaluation of direct cash subsidies. Haji Ismaili argued that these cash payments have proven ineffective in providing substantial help to workers and require revision for two main reasons.
First, he explained that citizens face numerous pressing problems, and when they receive cash subsidies, the money might be spent on utilities, phones, and other various expenses. However, the core obligation is to ensure the livelihood and essential nourishment of the people, particularly vulnerable groups. The emergence of malnutrition within families could create serious future problems for children. Therefore, he advocates for converting cash subsidies into commodity vouchers to guarantee that support directly translates into essential goods.
This perspective is reportedly shared by the government, parliament, and various experts, who have concluded that cash subsidies no longer have the same impact they once did and that their review should be a top priority.
Sustaining Support Amid Fiscal Challenges
Despite acknowledging the government’s challenges with resource shortages and budget deficits in funding the commodity voucher program, Haji Ismaili stressed that payment must continue. “The priority is ensuring the livelihood and essential sustenance of the people,” he asserted.
The proposal is to simultaneously convert cash subsidies into commodity vouchers while continuously maintaining the additional supportive vouchers already defined for vulnerable groups. This dual approach is deemed necessary because current incomes are insufficient to meet the living needs of the population.
Expanding the Range of Essential Goods
The final key recommendation involves a substantial expansion of the commodity basket offered through the vouchers. Haji Ismail highlighted that the diversity of goods in the voucher basket must be increased. “Currently, we have defined 11 items in the commodity voucher basket. This has the potential to be developed to include up to 25 different types of goods,” he said, adding that accessibility has also improved compared to before.
By defining the conditions for these commodity-based subsidies, these measures can prove highly effective, provided they are distributed monthly and sustained over time. This comprehensive review signals a focused effort to adapt economic support systems to better serve the Iranian people.
