Iranian MP: Government faces $13 billion deficit over paying cash subsidies
Azerbaijan, Baku, Apr. 22/ Trend F.Milad/
The Iranian government is facing 160 trillion rials (some $13 billion) budget deficit due to unlawful expenditures for implementing the Subsidy Reform Plan, member of the parliament Ahmad Tavakkoli stated.
"The government was obliged to allocate 30 percent of revenues out of implementing the subsidy plan to the production sector, but it has failed to meet the obligation," Ahmad Tavakkoli told the Fars news agency.
In late March, the Iranian government transferred 280,000 rials, which equals to some $15, to the accounts of Iranian individuals.
The money was an additional amount to 455,000 rials, some $24, which every Iranian has already been receiving every month as a compensation for the subsidy cut launched late in 2010.
The payment effected without any prior announcement by the government leading to the assumption that it would be the start of the second phase of the economic reform aiming at the cut in subsidies paid on different energy carriers and some basic foodstuff.
Parliament Speaker Ali Larijani said that the production sector has been ignored during the process of the implementation of the subsidy reform plan and reforms are required in this regard.
The subsidy reform plan, launched in December 2010, allows the Iranian government to gradually slash subsidies on fuel, electricity, and certain goods over the course of five years, with low-income families being compensated with direct cash handouts.