Iran’s Subsidy Support Scheme Confirmed for September, Payments Imminent
Tehran – The Iranian government has confirmed the upcoming fourth phase of its electronic subsistence subsidy scheme, with payments set to commence for low-income citizens in September. The initiative, a cornerstone of the nation’s social welfare policy, provides millions of households with dedicated funds for the purchase of eleven essential goods.
Details of the Upcoming Phase
The Ministry of Cooperatives, Labour, and Social Welfare announced that the scheme’s fourth installment will begin on September 19, 2024. Initially, the first three income deciles will receive a credit of 500,000 tomans per person. Information regarding the rollout for other deciles is expected to be announced shortly. The program, which launched in the winter of 2023, is designed to mitigate inflationary pressures and provide direct support to those most in need.
Financing and Sustainability Questions
While the government’s commitment to the scheme is clear, its financial architecture has been a topic of discussion. The initial phases were financed through a $1 billion allocation from the National Development Fund (NDF). According to the 2024 budget law, the government was mandated to fund the program by reallocating resources from the removal of cash subsidies for the top three income deciles, a measure estimated to yield approximately 40 trillion tomans.
However, reports indicate that sufficient funds were not secured for the third phase, which began in July 2024, leading to proposals for an additional $1-2 billion from the NDF. The outcome of this proposal remains undisclosed. More recently, the Head of the Plan and Budget Organization stated that revenues from import duties on cars brought into the country by Iranians living abroad will be directed toward financing the subsidy scheme.
The Targeted Subsidies Organization has announced the allocation of 27 trillion tomans for the fourth phase, though the precise origin of these funds has not been fully detailed. This has led to calls for greater transparency to ensure public confidence in the program’s long-term viability.
A Forward Path
The electronic subsidy card scheme represents a significant effort to support the livelihoods of millions of Iranian families. Experts emphasize that for the program to achieve lasting success, it must be supported by sustainable and transparent financing mechanisms, potentially including value-added tax revenues, rather than reliance on budgetary reallocations or the NDF. The government continues to refine the program to ensure its effectiveness and stability for the benefit of its citizens.
