Ministry of Finance wants to abolish electricity subsidy policy for the poor
More than VND8,000 billion of the budget allocated for electricity subsidies has contributed significantly to ensuring social security and motivating households to escape poverty. However, the Ministry of Finance still recognizes that this policy still has some limitations that need to be changed.
The policy of supporting electricity bills for poor households according to preferential price list was issued by the Government since February 2011. Accordingly, from March 1, 2011 to May 31, 2014, poor households will be supported with electricity price of 50kWh/month. The support level is equivalent to 30,000 VND/household/month.
From December 1, 2017 to present, the support level has been increased to 51,000 VND/household/month.
After 5 years of implementation (from 2011 to 2017), the state has supported electricity for about 2,342 thousand poor households and social policy households. Of which, poor households account for about 87% with a budget of more than 8,000 billion VND from the state budget. In 2018, the state bank plans to allocate more than 1,000 billion VND to support about 1,800 thousand poor households and social policy households.
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| The policy of subsidizing electricity prices for the poor is now considered ineffective (Illustration photo). |
According to the Ministry of Finance, in recent times, the policy of supporting electricity bills for the poor, policy families, etc. has contributed, together with other support policies of the State, to solving life problems, reducing difficulties for people affected by electricity prices, contributing to creating motivation for poor households to escape poverty. However, the Ministry of Finance believes that this policy still has some disadvantages and difficulties.
Specifically, the scope of support objects is wide and changes frequently due to regulations that social policy households must have electricity usage of less than 50kWh/month, ethnic minority households in areas without grid electricity... regardless of rich or poor, this has created certain inadequacies.
"In addition, supporting beneficiaries with cash has not been effective in the long term. Not to mention, households pay their electricity bills according to the notice of the electricity authority via phone or text message, so they do not have invoices, so if they want to get an invoice, they have to go to the electricity authority to request it," the Ministry of Finance said.
From the above shortcomings, in the next phase 2019 - 2020, the Ministry of Finance proposes 2 support options:
Option 1: Abolish the current free electricity support policy, the reason is that the low support level of 51,000 VND/month is no longer suitable for the poverty reduction orientation until 2020.
The abolition of the policy of supporting the poor according to the Ministry of Finance will ensure the principle of limiting free support policies and increasing conditional support policies. Thereby, the poor will proactively escape poverty, limit dependence and waiting for state support money... gradually moving towards the goal of sustainable poverty reduction.
In addition, according to the Ministry of Finance, the abolition of the above-mentioned free support policy also helps the State save annual public service budget. On that basis, the State budget has more resources to allocate capital and funding to implement other poverty reduction and social security policies.
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| According to the Ministry of Finance, by abolishing the policy of supporting the poor, the poor will proactively escape poverty, limiting their dependence and reliance on state support. |
"The initial phase of abolishing the support policy may have some impact on the lives of some poor households. Therefore, the State needs to simultaneously and effectively implement other social security and poverty reduction policies to help people stabilize their lives and escape poverty," the Ministry of Finance said.
Option 2: Integrate the current electricity price support policy with the sustainable poverty reduction policy for the 2016-2020 period and supplement resources in 2019-2020 to implement the national target program on sustainable poverty reduction from the funding source for implementing the electricity price support policy.
This integration will focus the state management on poverty reduction policies. At the same time, integrated social security policies will contribute to accelerating the poverty reduction goal.
The Ministry of Finance said that after synthesizing comments from ministries and about 53 localities, the majority agreed with option 1. Therefore, this agency proposed that the Government approve option 1 - abolishing the policy of supporting free electricity for poor households with the expected implementation date from January 1, 2019.