Iranian industry sector receives no profit from subsidies cut

Business Materials 29 July 2011 16:23 (UTC +04:00)

Azerbaijan, Baku, 29 July/ Trend D.Khatinoglu/

The Iranian government hasn't assigned any finance to industry sector from the profit made on cutting subsides in current solar year (which started on March 21), Fars News Agency quoted a member of parliament's energy commission Hossein Gorousi as saying.

The Iranian government cut a part of subsides for commodities and energy production in December 2010.

According to Iran's general budget for current solar year, the government will save $54 billion during this solar year as a result of removing subsides. Half of this sum ($27 billion) would be transferred to citizens' bank accounts ($44 per each citizen), 30 percent go to industry sector and 20 percent to the government's current expenditures.

Meanwhile, the government said it transferred $21 billion only during the first half of year to citizens' bank account.

The government has now faced a problem in transferring money in compensation to the Iranian citizens' bank accounts.

Ahmadinejad had to borrow $5 billion from the Central Bank of Iran to transfer to citizens' bank account.

"The Iranian government was to allot $3 billion in 2010 and $12 billion in 2011 to the industry sector out of the funds gained from subsidy cut, but no finance has been assigned yet," Gorousi said.

President Ahmadinjead announced assigning $10 billion from the National Development Fund to the Bank of Industry and Mining of Iran last week.

However, the Iranian Guardian Council, an entity that should ratify the withdrawals from the National Development Fund, announced that the government was not granted a permission to allocate $10 billion to industry sector from this Fund.

Earlier Iranian parliamentary energy commission Mohammad Reza Katuzian said that Ahmadinejad's government is spending construction expenses on absolutely different fields, particularly transferring money to people's cash bank account after removal of subsides. "Several construction projects, including the South Pars gas field development project, were suspended because of assigning the construction expenses to other spheres," Katuzian said.