Government seeks to cut cash subsidies of 30 per cent of Iranians
Baku, Azerbaijan, Jan. 28
By Rahim Zamanov - Trend:
Iranian administration has once again asked rich families to voluntarily give up receiving cash subsidies, the Iranian Mehr News Agency reported on Jan. 28.
Mohsen Bahrami Arzi, an advisor to the vice president for executive affairs, said on Jan. 28 that the government expects about 30 per cent of Iranian families to give up receiving cash subsidies.
"Currently the number of people who receive cash subsidies is even more than the country's population, he said.
"Many have migrated to foreign countries but they still receive cash subsidies, some have two or more ID cards, and some are foreign nationals," Bahrami Arzi explained.
"In a symbolic move, Iranian President Hassan Rouhani has voluntarily given up receiving cash subsidy," he added. "Vice President for Executive Affairs Mohammad Shariatmadari will be in charge of carrying out the second phase of the subsidy reform plan," he said.
President Rouhani's chief of staff, Mohammad Nahavandian, said in November that the Iranian administration is not going to cut the cash subsidies of rich families since identifying such families is a kind of breach of their privacy.
"There are two substitute methods. The first is that the affluent families give up voluntarily receiving the subsidies. And the second is that the administration creates more jobs for people," Nahavandian said.
This is while the budget and planning committee of the Iranian parliament (Majlis) on October 20, 2013 approved stopping 30 percent of cash subsidy payments.
The three groups of Iranian families with the highest incomes include over 22 million people.
Iran's Central Bank Governor Valiollah Seif has said that people have well understood the need to cut cash subsidies for affluent groups, and society is prepared to do the job.
Meanwhile, the Majlis approved a bill on Nov. 3 that allows the administration to pay cash subsidies at least to the end of the current Iranian calendar year (March 20, 2014).
The subsidy reform plan pays 45,500 rials or about $18 based on the U.S. dollar official exchange rate of 24,800 rials to Iranians, eliminating subsidies for fuels and some commodities.
Head of Parliamentary Economic Committee Gholamreza Mesbahi Moqaddam has said the subsidy reform plan put into place by the administration of former president Mahmoud Ahmadinejad has created $13 billion more in liquidity than was anticipated.
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 a budget deficit.