Official: Iranian administration has to amend subsidy reform law
Azerbaijan, Baku, Oct.20 / Trend F.Karimov /
The administration of the Iranian President Hassan Rouhani has to amend the subsidy reform law because of its flaws and imperfections, IRNA quoted president's Deputy for Parliamentary Affairs Majid Ansari as saying.
Implementation of the law under the current circumstances is impossible, he added.
Special working groups have been formed to identify families who do need to receive subsidies in cash and also identify families who do not need to receive the subsidies, he noted.
The Iranian parliament (Majlis) and the administration have agreed to finalize the cutting of 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 on Saturday.
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 per cent of cash subsidies, which are paid to people in Iran, should be cut.
Through cutting of cash subsidies of high-income strata of the society, the problem of budget deficit can be resolved, he added.
Paying of cash subsidies to people is harmful for the national economy, he said. Cutting of 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 must pay cash subsidies in the amount of 10 trillion rials (about $400 million based on the US dollar exchange rate of 24,800 rials) 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 rich people do not need financial assist of the administration, he noted.
The Majlis will study a proposal put forward 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 within the next two weeks.
The head of the Parliamentary Economic Committee Gholamreza Mesbahi Moqaddam said that the subsidy reform plan of the government has created $13 billion more liquidity than it 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 of cash subsidies to people is carried out just in Iran. Paying of cash subsidies to all groups of people with different incomes should be revised given that the administration is facing budget deficit.