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Wednesday, 1 August 2018

Gov’t will not need an overdraft for FY2018-19 to cover new subsidy beneficiaries

Gov’t will not need an overdraft for FY2018-19 to cover new subsidy beneficiaries: The government will not seek an overdraft for the FY2018-19 state budget to accommodate new additions to subsidy rolls, Supply Ministry Spokesman Ahmed Kamal said yesterday, Al Shorouk reports. Instead, the government is focusing on weeding out moochers and other beneficiaries who are “undeserving” of subsidy allocations, which would allow the ministry to redirect these resources to the approved newborns. The Madbouly Cabinet’s social justice committee will announce within one month’s time the criteria for removing beneficiaries from the ministry’s subsidy rolls, Kamal said. Earlier this month, a government source had told us that the cabinet was considering a budget overdraft to cover the expenses.

Background: The government had issued new regulations last year to govern new entrants, which cap the number of family members per card to four and introduce a EGP 1,500 monthly income threshold for eligibility for full-time workers, as well as a EGP 1,200 monthly ceiling for pension earners. The ministry announced it would open the door for more citizens to register for ration cards and for already-registered families to add newborns to their data as of today. Minister Ali El Moselhy had said on Monday that the government expects to add 3-4 mn new subsidy benefactors during the registration period, which closes on 31 October. Commodity subsidy spending in the FY2018-19 budget is up 36.6% y-o-y to EGP 86.18 bn.

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