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Sunday , November 29 2020

Governmental study on rationalizing subsidies

KUWAIT CITY, Oct 13: A governmental study is ongoing about the possibility of rationalizing expenditures and subsidies provided to citizens in its various forms by dividing their income into segments. This is aimed to contribute to financial and economic reforms in the country, reports Aljarida daily quoting reliable sources.

They explained that this government approach comes along the lines of global systems related to this matter. This would equitably distribute wealth and properly direct social support to those who deserve it, especially since the gap between incomes, prices and costs of living continue to widen.

The financial situation in the country necessitates rationalizing support as a form of financial reforms, in addition to the need to search for new channels for surpluses and revenues besides the main source of financing the budget, which is oil.

Most of the previous studies and recommendations affirmed the need to implement measures for a partial and gradual lifting of some aspects of support that prevailed in the past decades. This is one of the requirements for implementing the economic reform program. On the other hand, the reduction procedures and programs did not witness a speedy implementation, and most of them are not in line with any new changes in the oil prices.

The sources insisted that the citizen’s participation in the state’s financial reforms is a fundamental essence for modifying the course of government spending.

They highlighted the need to immediately start listing citizens by preparing a register related to provision of support, especially since the country’s wealth is not limited to a specific group, and a fair distribution must be made. They added that restructuring the support system in the general budget item is required while strengthening the investment environment and finding more ways to combat corruption.

The sources stated that addressing the regulation of subsidies is a sensitive matter due to its relevance to the main services provided to the citizens, and that the emphasis on not touching citizens’ income is deserving and sound. Rationalizing subsidies is necessary, and it may be rejected if it does not coincide with other government measures related to spending cuts.

They stressed that there are segments of citizens who really deserve full support and more than what is provided to them, while there are other segments that do not deserve it, such as owners of projects, real estates, and others.

The sources said it is not possible to give equal access to services such as electricity, water, gasoline and other subsidies to, for instance, a retiree who receives a pension from the state of up to KD 900 and at the same time owns real estate that brings in monthly revenues of up to KD 100,000, and a citizen who only get fixed monthly salary.

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