Iranian government, parliament agree on cutting 10 million subsidies
Baku, Azerbaijan, Feb. 4
By Khalid Kazimov - Trend:
The Iranian government and parliament have agreed to cut current public subsidies by about $1.5 billion in the next Iranian calendar year (starting Mar. 21), when subsidies to 10 million people will be stopped, Tasnim news agency reports Feb. 4.
After long discussions, the Iranian legislative and executive bodies agreed on Feb. 3 to cut subsidies going to high-income individuals.
As a result, subsidies to those earning more than $720 a month will be cut starting from the mentioned date. It still remains to be decided whether the mentioned sum falls on the whole family or just income of the head of the family.
Last April Iran's president, Hassan Rouhani announced that the government spends about $1.4 billion (based on then official rate of 25,500 rials per each USD) per month on the cash subsidies for citizens.
The cash subsidies impose about $392 million deficit in the budget per month for administration, he noted.
The administration of former president Mahmoud Ahmadinejad implemented the first stage of the subsidy reform plan toward the end of 2010.
The subsidy reform plan is aimed at easing pressure on state finances by cutting tens of billions of dollars from government subsidies on food and fuel. The government pays cash to citizens as compensation for increased prices by cutting subsides.