Just 15 million Iranians eligible to receive cash subsidies

Business Materials 20 May 2014 16:00 (UTC +04:00)

Baku, Azerbaijan, May 20

By Fatih Karimov - Trend:

Just 15 million Iranian are eligible to receive cash subsidies, Head of the Iranian Chamber of Commerce's Export Committee, Asadollah Asgaroladi said.

The administration's insist on paying cash subsidies to all people is not logical, Iran's ISNA news agency reported on May 20.

Continuing this situation will lead to a rising liquidity in non-production sectors, and in turn, to a rising inflation rate, he noted.

If the current situation continues, reducing the inflation rate to 25 percent, set by the government, will not be possible, he said.

Despite the demands of the Iranian officials, only 2.4 million citizens of the country voluntarily gave up on receiving cash subsidies.

Iran's State IRNN TV quoted the spokesperson of the Iranian government, Mohammad Bagher Nobakht, as saying on April 23 that the administration will save some 12,000 billion rials (about $470 million based on official rate of 25,513 rials per each USD) from the withdrawals.

He also said that some 73 million Iranian citizens registered applicants for receiving cash subsidies, while the government expected 30 million people would not register for the offer.

On April 21, Iranian vice president for Executive Affairs Mohammad Shariatmadari said that the number of people who actually gave up receiving cash subsidies was not satisfactory.

"Only a small portion of people announced that their monthly income is more than 25 million rials," he added.

The subsidy registration website asked people to announce their monthly income if it is below 6 million rials, between 6 million and 10 million rials, between 10 million and 20 million rials, between 20 million and 25 million rials, or it is above 25 million rials.

Iranian media outlets reported that most of the registered applicants have announced that their income is less than 6 million rials per month.

The administration of former president Mahmoud Ahmadinejad implemented the first stage of the subsidy reform plan toward the end of 2010 in an attempt to wean the country off food and fuel subsidies.

In the first stage the government paid 45,500 rials (about $18) to citizens to compensate for a partial cut of subsidies.

It is estimated that the government will acquire 480 trillion rials (about $19.3 billion) in the current Iranian calendar year (March 2014-March 2015) in revenues through the implementation of the second phase of the economic reform plan.