Three million Iranian families not to receive subsidies

Iran Materials 19 December 2011 16:12 (UTC +04:00)

Azerbaijan, Baku, Dec. 19 / Trend F.Milad/

The second phase of implementing the Subsidy Reform Plan has envisaged removing subsidies of some three million Iranian families, the Iranian parliament's economic committee speaker said.

Nasser Mousavi told the ILNA news agency that the administration is planning to pay more cash subsidies to the economically vulnerable strata and cut subsidies of the well-off families.

The Iranian government is facing 100 trillion rials (some $10 billion) budget deficit due to unlawful expenditures for implementing the Subsidy Reform Plan, a member of the parliament said earlier.

Ja'far Qaderi added that the government has so far earned 170 trillion rials out of implementing the plan, but paid around 270 trillion rials to people and industries as cash subsidies, the Mehr news agency reported.

Meanwhile, the deputy economy minister said earlier this month that there is no shortage in the budget related to paying subsidies. So, cash handouts will be continued by the end of the year.

Mohammad-Reza Farzin added that the government has issued a report on the first nine months of paying cash subsidies, the Fars news agency reported.

If the government does not change prices based on the subsidy reform plan, it will face around $54 billion budget deficit, he noted.

The subsidy reform plan, launched in December 2010, allows the Iranian government to gradually slash subsidies on fuel, electricity, and certain goods over five years, with low-income families being compensated with direct cash handouts.