Title: Iran Implements Targeted Subsidy Reforms, Boosting Support for Lower-Income Households
In a significant move to refine its social support system, Iran is advancing a major policy initiative focused on the reallocation of subsidies. The program is designed to enhance the purchasing power of its citizens, with a clear emphasis on providing substantial, targeted assistance to lower and middle-income families.
Streamlining Subsidy Allocation
A central pillar of this policy is the ongoing and rigorous process of phasing out subsidies for high-income households. Official reports confirm that subsidies for approximately 2 million affluent families have already been discontinued. This measure is a strategic effort to free up resources for a more equitable distribution, ensuring that state support reaches those in the lower deciles of society who need it most.
A Transparent Review Process
For those households affected by the subsidy removal, a formal appeals system is in place. To date, around 180,000 families have submitted grievances. After a thorough review of their financial status, between 5 to 8 percent of these appeals have been accepted, resulting in the reinstatement of their subsidy benefits. This demonstrates the system’s built-in mechanism for accountability and correction.
The National Electronic Voucher Scheme
The cornerstone of this renewed support is the expansion of the Electronic Voucher (KalaBarg) program. Starting in the Iranian month of Aban (late October/November), the scheme will be rolled out at a provincial level, specifically targeting the seven lowest-income deciles.
The new voucher allocations are as follows:
- Deciles 1 to 3: 500,000 Tomans per person.
- Deciles 4 to 7: 350,000 Tomans per person.
This credit will be loaded onto the family head’s card, providing direct and efficient assistance.
Eligible Goods and Nationwide Access
The voucher credit is designated for the purchase of a specific basket of essential goods, including:
- Dairy products (milk, cheese, yogurt)
- Eggs
- Poultry and Mechanized Red Meat
- Liquid Oil
- Rice, Pasta, and Legumes
- Sugar and Broken Sugar
- Frozen Veal and Turkey
To ensure widespread access, a network of over 260,000 contracted stores across the country will accept the vouchers. A dedicated mobile application allows users to track transactions, check their balance, and locate nearby participating retailers. In a region-specific provision, households in southern parts of the country will also be able to use their credit for fish purchases.
Ensuring Economic Stability
Concurrently, the government and parliament are actively evaluating mechanisms to stabilize prices and protect household purchasing power against inflationary pressures. Two primary scenarios are under discussion:
- Scenario One focuses on maintaining a fixed exchange rate for producers to calculate subsidies, aiming for baseline cost stability.
- Scenario Two, which aligns with the government’s primary objective, seeks to directly stabilize the consumer’s ability to purchase a fixed quantity of goods, potentially through defined quotas for each item.
The full implementation of this next phase is slated to begin in the month of Azar (November/December), with an estimated monthly financial allocation of approximately 28 trillion Tomans, underscoring the scale of the government’s commitment to this social support program.