Azerbaijan, Baku, Oct.19/ Trend F.Karimov/
The Iranian parliament (Majlis) and the administration have agreed to finalize cutting cash subsidies of some high-income Iranian families by the end of the current fiscal year (March 2014), the Mehr News Agency quoted Central Bank of Iran governor Valiollah Seif as saying.
Iranian people have really understood the need [to cut the cash subsidies], he said, adding that the goal of 'economy without oil' has been materialized in the country.
On October 13, the website of the Iranian parliament (Majlis) quoted MP Abbas Rajaee as saying that more than 30 percent of cash subsidies, which are paid to people in Iran, should be cut.
Through cutting cash subsidies of high-income strata of the society, the problem of budget deficit can be resolved, he added.
Paying cash subsidies to people is poisonous for the national economy, he said. Cutting subsidies of all but villagers and pensioners and those who are under coverage of welfare organizations will not be problematic, he explained.
Meanwhile, the Fars News Agency quoted Mohammad Baqer Nobakht, the presidential advisor for planning affairs, as saying that the administration is facing 10 trillion rials (about $400 million based on the US dollar exchange rate of 24,800 rials) to pay the cash subsidies this month.
Each month, 35 trillion rials (about $1.4 billion) is paid as cash subsidies to 76 million Iranians. This issue is the cause of a number of problems, he said. In fact, the wealthy do not need financial assist of the administration, he noted.
The Majlis will study a proposal made by the administration to cut cash subsidies of the three groups of the society with the highest income, IRNA reported.
MP Ja'far Qaderi told IRNA that the Majlis will study the proposal with the next two weeks.
Head of Parliamentary Economic Committee Gholamreza Mesbahi Moqaddam has said the subsidy reform plan put into place by the government has created $13 billion more in liquidity than was anticipated.
The subsidy reform plan pays 45,500 rials (about $18 based on the U.S. dollar official exchange rate of 24,800 rials) to Iranians, eliminating subsidies for fuels and some commodities.
MP Ahmad Tavakkoli has criticized the current method of cash subsidy payments, saying that paying subsidies in cash to people is carried out just in Iran. Paying cash subsidies to all groups of people with different incomes should be revised given that the administration is facing budget deficit.