Iranian MP denies paying New Year’s gift to 73 million people
Azerbaijan, Baku, Feb.12 / Trend F.Mehdi/
Iranian MP Ezzatollah Yousefian-Mola has denied news about paying cash assistances to 73 million Iranians on the verge of the new Iranian calendar year, saying that the payment will just be allocated to the poor strata of society, ILNA reported.
To date the exact number of families eligible to receive the cash payment has not been specified, he said adding that parliament has approved paying cash assistance to low-income and poor families.
Based on this decision, 700,000 rials (about $57) will be paid to each member of low-income families and 900,000 rials (about $73) to each family member under the auspices of welfare organisations.
Accordingly, some $2.7 billion will be drawn out of the National Development Fund in this regard. The money will be deposited into bank accounts of the families' breadwinners on February 19.
On January 14, MP Abdolkarim Hashemi told the Fars News Agency that the Iranian administration is facing problems in providing money for paying cash subsidies to the public.
In such a situation the second phase of the subsidy reform plan could not be implemented, he added.
"For the time being, the government is providing the necessary money out of sources other than freeing up prices based on the subsidy reform plan," he noted.
On December 25, 2012, the Fars News Agency quoted the chairman of the Iranian parliament (Majlis) planning and budget committee Esmaeel Jalili as saying that implementing the second phase of the subsidy reform plan in Iran would significantly raise fuel prices.
The issue will contribute to more unemployment, economic recession and liquidity accumulation, he added.
The administration's revenues from freeing up prices according to the plan were less than the cash payments, he noted.
The subsidy reform plan pays out $37 to Iranians while eliminating subsidies for fuels and some commodities.
Nearly 74.5 million Iranians receive cash subsidies. To date the government has paid around 746 trillion rials (about $61 billion) as cash subsidies within the past 22 months, equalling 15 per cent of the national budget for the current Iranian fiscal year.
When the plan started in December 2010, it was expected to cause about $32 billion in liquidity. However the greater demand for cash subsidies and the government's money borrowed from the Central Bank to pay for the subsidies led to a $45 billion liquidity.
The government implemented the first stage of its targeted subsidies plan towards the end of 2010 in an attempt to wean the country off food and fuel subsidies. At the same time, Ahmadinejad called it the "biggest economic plan of the past 50 years".
It allows the government to gradually slash subsidies on fuel, electricity and certain goods over the course of five years with low income families being compensated with direct cash hand-outs.