Iran to implement second phase of subsidy reform plan by April 2014
Baku, Azerbaijan, Mar. 15
By Rahim Zamanov - Trend:
The second phase of the subsidy reform plan will be implemented by late Iranian calendar month of Farvardin (which will end on April 20), Vice President for Executive Affairs, Mohammad Shariatmadari said on Mar. 15, Iranian Fars News Agency reported.
"The second phase will be implemented once the applicants sign up for cash subsidies," Shariatmadari said.
Shariatmadari is in charge of carrying out the second phase of the subsidy reform plan.
Iran's IRNA News Agency reported on February 4 that Iranian parliament (Majlis) approved that the government should implement the second phase of the subsidy reform plan at the beginning of the second quarter of the next Iranian calendar year (to start on March 21).
The Iranian Mehr News Agency reported on January 28 that Iranian administration has once again asked rich families to voluntarily give up receiving cash subsidies.
Mohsen Bahrami Arzi, an advisor to the vice president for executive affairs, said on January 28 that the government expects about 30 percent 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," Arzi 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," Arzi added.
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 voluntarily give up 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 the society is prepared for doing the job.
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.
Head of Parliamentary Economic Committee Gholamreza Mesbahi Moqaddam 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 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 budget deficit.