Iran may cut 30 percent of cash subsidy payments

Iran may cut 30 percent of cash subsidy payments

Azerbaijan, Baku, Oct.5/ Trend F.Karimov/

The Iranian parliament (Majlis) has proposed the administration to cut cash subsidy payments to 30 percent of people with the highest level of income, the Tasnim News Agency reported.

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. So, paying cash subsidies to all groups of people with different income should be revised given that the administration is facing budget deficit.

At present, the government pays 33000 trillion rials (about $133 billion) per month. If the government can cut 30 percent of cash subsidies, it will be able to save 60 trillion rials to compensate for the budget deficit. This can make for one tenth of the current year's budget deficit, which equals to the cash subsidy for 74 million Iranians.

Some MPs opposed the predicted deficit in budget figures and Iran's parliament dismissed a vote on an urgent current year budget bill revision.

On September 4, the IRNA news agency quoted Iranian president Hassan Rouhani as saying the predicted income of Iran's current year's budget had been realised by 52.8 per cent during the last Iranian calendar month (July 23- August 22).

He went on to note that during the first months of the current solar year the budget income had been 43 per cent realised.

Rouhani recalled that the country is facing a massive budget deficit, adding the current year's budget proposed by the previous administration is unreal.

In September, spokesman of the Iranian Parliament Energy Committee Hossein Amiri-Khamkani said that the Iranian administration will face a $40.4 billion (based on the official rate of 24,770 rials per each USD) deficit in the current solar year's budget (started on March 21) if it pays cash subsidies, ILNA news agency reported.

He went on to note that the administration can prevent this problem with increasing prices.
In mid-August, ISNA quoted First Vice President Eshaq Jahangiri as saying that one third of government income recognised in the budget would not be realised.

MP Abdolkarim Hashemi has said that the administration is facing problem in providing money for paying cash subsidies to the public.

"For the time being, the government is providing necessary money out of sources other than freeing up prices based on the subsidy reform plan," he noted.

The subsidy reform plan pays out $37 to Iranians while eliminating subsidies for fuel and some commodities.

In July, Iranian government Speaker Mohammad Bagher Nobakht said the current year's budget is too optimistic so the next administration should revise it.

They forecast that the administration would face a $28.25 billion deficit in the current year's budget.

Another MP Iraj Nadimi also believes that the deficit in the current year's budget may reach $40.4 billion.

Tasnim news agency quoted Nadimi as saying that a couple of months delay in submitting budget to the parliament is the main reason for the loss.

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