Tehran Authorities Accused of 'Overstepping' as They Roll Out Welfare Projects

Tehran's city government has launched a series of welfare projects aimed at helping residents cope with soaring living costs, but the measures are raising questions about funding, effectiveness and whether the local authority is taking on responsibilities that belong to Iran's national government.

According to the city authorities, four projects have been introduced with the stated goal of protecting residents, including a housing scheme, a programme freezing the prices of 12 essential goods and a maternity support package.

The question, however, is how these projects will be funded and whether the municipality is exceeding its traditional functions.

In Iran, city authorities are responsible for local services and urban management, while the national government handles broader economic policy, including efforts to control inflation.

Iranian law does grant city authorities some duties beyond ordinary urban services. Specifically, Article 55 of Iran's Municipalities Law stipulates that the municipality must provide public food markets, making some essential goods more affordable, as well as social welfare facilities and low-cost housing.

The dispute, therefore, is not over whether Tehran's authorities are permitted to provide these services, but over the scale and the way they are funded.

The municipality's price-freezing initiative, called "No Inflation," is the most contentious project. It was introduced as year-on-year inflation reached nearly 90 percent last month, while annual food inflation hit 108.8 percent.

Many voices have expressed doubt about how the project is funded and whether it will be effective. Others argue the measures could deepen inequality between the capital and other cities.

The projects are seen as a step toward addressing the enormous economic challenges facing Tehran's residents, which have worsened since the United States and Israel launched a war against Iran on February 28.

Tehran Mayor Alireza Zakani said the municipality had recently secured prices 5 to 50 percent below market rates for the next six months.

Yousef Akandeh, a political activist, told Al Jazeera that freezing the prices of certain goods or offering free services would not by itself bring inflation down to zero.

"Even if we assume that Tehran's authorities have succeeded in stabilising the prices of 12 essential goods, what about rent, medicine, transport fares and other living costs?" Akandeh asked.

According to Akandeh, genuine steps to tackle inflation must begin with controlling liquidity growth and monetary discipline, which he said is nearly impossible amid the ongoing war.

The municipality has also introduced a maternity support programme under which mothers with children born this year will receive a monthly credit worth up to 40 million rials ($15) for two years for each newborn.

Akandeh raised the issue of institutional overlap, noting that a similar programme already exists at the national level.

"The government runs a similar package and provides monthly payments for all newborns nationwide, not just in Tehran. If the municipality's package is independent of the national one, families in Tehran could benefit from both programmes at the same time," Akandeh said.

Receiving support from both programmes is not in itself wrong. However, critics question whether this is a reasonable use of Tehran's resources, especially when the city faces many competing spending needs.

Amir Dabiri Mehr, a former adviser to Tehran's authorities, told Al Jazeera that while supporting the homeless is part of the municipality's social responsibility, the problem lies in a lack of transparency. The municipality is funded by taxes and construction density permits.

"People have the right to know what the municipality spends within the framework of its original duties and on tasks it has chosen for itself, and where the resources come from," Dabiri Mehr said.

Hamshahri, the municipality's mouthpiece, said the "No Inflation" project is not funded by subsidies from the city budget, but through direct purchases from producers and reduced commercial profit margins at stores run by the city council.

According to Mehr, the biggest crisis facing Tehran's residents is housing, which falls under the national government's responsibility. Food and living costs are also the national government's responsibility.

"If the goal is to solve people's problems, it seems the biggest problem facing Tehran residents today is the housing crisis, and this cannot be solved by building one apartment block with a few housing units," he said.

Al Jazeera tried to contact Tehran's city authorities for comment but received no response.

Tehran Mayor Zakani, however, has defended the funding arrangements, telling the local Hamshahri newspaper that the "No Inflation" initiative will not rely on direct subsidies from the city budget, but instead on direct purchases from producers and reduced commercial profit margins at city-run stores.

Zakani also said the programme will use the city's resources, bank financing and partnerships.