Ministry of Finance revamping subsidies for efficiency, equity

• Salaries and subsidies collectively account for around 80 percent of Kuwait’s general budget, with subsidies alone consuming more than 20 percent of it

• In the draft budget for 2023/2024, the subsidies totaled approximately 5.94 billion dinars before decreasing in the subsequent budget for 2024/2025

The Ministry of Finance is exploring subsidy redistribution to curb wastage and promote fairness and sustainability.
An official source within the ministry disclosed ongoing efforts to address inefficiencies in the subsidy system, with a focus on evaluating its impact on end beneficiaries.

The source emphasized the necessity of redistributing subsidies to better serve the ultimate beneficiary and curb wasteful spending. They highlighted that salaries and subsidies collectively account for around 80 percent of the state’s general budget, with subsidies alone consuming more than 20 percent of it.

Therefore, a more thorough examination is required, in addition to salaries, which are considered indispensable.

In the draft budget for 2023/2024, the subsidies totaled approximately 5.94 billion dinars before decreasing in the subsequent budget for 2024/2025. It’s noteworthy that the finance department was committed to preserving the rights of employees in Part One of workers’ compensation and citizens’ earnings across various subsidies while preparing the draft budget for 2023/2024. These subsidies were provided without any reduction or prejudice to their amounts.

The ministry has devised a plan to revamp the subsidy model to ensure fairness and sustainability. This plan entails studying eligible groups. Meanwhile, the government’s strategy includes a warning that the state can no longer postpone entitlements to address its financial and economic situation. Instead, it aims to develop programs focused on diversifying income sources and curbing wasteful public expenditures.