It is very bad, and it was probably the main reason for the protests that started a few days ago by the hardliners. They wanted to get rid of the Rouhani administration. But now the situation is out of their control. More on that later.
Here is part of a very good analysis of the Iranian budget by Djavad Salehi-Isfahani:
In keeping his right-of-the-center economic ideology, Rouhani is putting his faith in the ability of the private sector, domestic and foreign, to invest and expand employment while the government tries its best to stay out of the way.
What we do know is that the talk of continuing sanctions is keeping foreign investors at bay, at least for the moment. With weary foreign investors, the private sector-led growth strategy does not seem very promising.
One of the main stated goals of this budget is to create jobs, but it is hard to see how it can do that by slashing the development budget at a time that interest rates are very high (they exceed inflation by 5 percentage points or more). The unemployment rate has been rising in the five years that Rouhani has been in office, mainly because of increased supply pressure, but low demand has been an equal culprit. With unfavorable news about the future of the nuclear deal and the removal of sanctions, thanks to the 180 degree turn in US policy toward Iran, the prospects for a foreign-investment driven recovery are dim. With public patience running low, the debates in the parliament over this budget should be more serious than the usual haggling over the needs of special interests.
The biggest budget cut is reserved for the popular cash transfer program, which is much maligned by government experts and the business press. Started in 2011, under president Ahmadinejad, the program gave each Iranian a stipend of about $90 per month (USD PPP), financed by savings from energy subsidy reform and printing money. Rouhani has been against this program from the beginning and has been undermining it since he was elected, but this year he gets to deliver the death blow: he proposes to cut the funding for the program by more than half, from 10% of total government expenditures to 5.4%. He is not proposing to cut the level of individual transfers, which inflation has done already — they are now worth less than one-third of their original amount — but to cut the number of recipients. The government intention to cut cash transfers is highly controversial, and has been hotly debated in social media since it was made public three weeks ago. Along with the announcement that the price of gasoline will be 50% higher next year, it is undoubtedly a source of discontent that has been displayed in Iranian cities in recent days. With inevitable errors in cutting people out of the roll, expect more disgruntled citizens.
https://djavadsalehi.com/2017/12/31/rouhanis-new-budget-aims-to-eliminate-cash-transfers/