Title: Parliamentary Focus on Smart Subsidy System to Alleviate Economic Pressure
Subtitle: Legislator Highlights Historical Precedent and Existing Legal Framework for Essential Goods Support
In response to growing public discussion about support mechanisms, a member of Iran’s Planning and Budget Commission has clarified the legislative history and potential of a digital subsidy card system for essential goods.
A Mandate from Parliament
Jabbar Kouchakinejad, referencing existing legislation, stated that the Islamic Parliament, during its review of the 2022 national budget, obligated the government to maintain the price of essential goods at September 2021 levels. This was to be achieved specifically through an electronic goods-allotment system, or “smart card.” Furthermore, a law passed by the previous parliament mandates the use of such a system during critical conditions to supply people with basic commodities.
“The necessary systems for issuing smart cards were announced to be in place by the then-Minister of Labor and the Central Bank,” Kouchakinejad noted. The funding mechanism was intended to come from the difference between the preferential and free-market exchange rates at the time.
The Shortfall of Simpler Alternatives
The legislator expressed regret that successive administrations, citing the need for sophisticated infrastructure and extra effort, did not fully implement this comprehensive plan. Instead, they relied on simpler direct cash payments. He argued that the effectiveness of such cash transfers has diminished, pointing out that the amounts are now insufficient to cover basic needs, such as purchasing a kilogram of meat.
A Proven Model for Challenging Times
Kouchakinejad emphasized that the model of a goods-allotment system has a successful domestic precedent, having been used effectively during the imposed war of the 1980s. He also highlighted that the current Speaker of Parliament, Mohammad Bagher Ghalibaf, has repeatedly stressed the necessity of returning to this method—an approach also used globally to support citizens during economic crises.
“In the 1980s, essential items like chicken, meat, rice, and oil, which are crucial for the livelihood of low-income families, were supplied this way, and the same approach should be pursued today,” he stated.
Addressing the Implementation Gap
A key concern raised is the current disparity between government subsidies and market prices. The state allocates billions of dollars in preferential foreign currency for the import of essential goods at low prices, yet these savings often do not reach the consumer. The legislator cited the example of chicken, which is sold to the public at a price far higher than what the subsidized currency rate would suggest, implying that the benefits are not being fully passed on.
A Proposed Pathway Forward
The proposal involves a well-planned digital system to deliver a defined basket of essential goods—such as specific quantities of rice, red meat, chicken, and oil—monthly to the lower and middle-income deciles of the population. Kouchakinejad dismissed accusations that this is a return to a “coupon economy” as baseless, reiterating that it is a globally recognized tool for crisis management, fundamentally different from the current cash payments which do not guarantee the physical availability of affordable goods.
He concluded that with precise planning and the intelligent implementation of the existing electronic goods-allotment framework, the state can more effectively address livelihood challenges and ensure that essential support directly reaches the people.