Title: Fifth Phase of Iran’s Essential Goods Subsidy: A Guide to Payment and Policy
The Iranian government’s Essential Goods Subsidy program, a key social support initiative, is set to continue with its fifth phase, reinforcing the state’s commitment to household purchasing power.
Continuation of Household Support
The government has successfully disbursed four previous rounds of the electronic subsidy, and millions of households now await the implementation of the fifth phase. This program is a central component of the state’s strategy to provide continuous livelihood support to its citizens. While the exact date for the fifth phase is yet to be officially announced, its necessity has been underscored by high-ranking officials.
Mohammad Bagher Ghalibaf, the Speaker of the Islamic Consultative Assembly (Majlis), has emphasized the importance of continuing the subsidy scheme. He stated that the program plays a vital role in helping to preserve the purchasing power of families under current economic conditions. He further highlighted that stabilizing the prices of essential goods, coupled with government payments to cover price differences, contributes to a more efficient use of national resources.
Navigating Financial Provisions
The execution of the subsidy program is governed by the national budget law, which mandates that the government fund the subsidies for lower-income deciles by reallocating resources from the removal of cash subsidies from the top three income deciles. The process of identifying and removing high-income recipients, managed by the Ministry of Welfare, has been methodical, with approximately six million individuals removed from the cash subsidy list so far.
Even upon completion of this reallocation, the freed resources may not be sufficient to fully cover the lower deciles. This presents a policy challenge that the government is actively working to resolve within the framework of its fiscal responsibilities.
Anticipating the Fifth Phase
All eyes are on the announcement of the fifth phase’s disbursement date. Eligible families are keen to receive precise information to plan their household budgets effectively. Predictions suggest a potential rollout in the third month of the upcoming Iranian calendar year (starting November 2024), contingent upon the finalization of the necessary financial arrangements.
A Look at the Fourth Phase
The fourth phase, which was credited in the month of Shahrivar, provided a subsidy for the purchase of 12 essential items. These included rice, oil, red meat, chicken, dairy products, pasta, legumes, eggs, and sugar. Turkey meat was a recent addition to the list of eligible goods. The disbursement was structured as follows:
- Deciles 1-3: Received 500,000 Tomans on the 19th of Mehr.
- Deciles 4-7: Received 350,000 Tomans on the 29th of Mehr.
Policy Objectives of the Program
The Essential Goods Subsidy program is designed as a complement to cash subsidies, enabling the purchase of basic goods without a cash withdrawal from a bank account. Its primary objectives are to support the livelihood of the people and ensure the equitable distribution of subsidies. In the upcoming year, the credit will be directly allocated to the national identification code of households, allowing eligible citizens to make purchases from 230,000 member stores without restrictions on brand or product type.