TEHRAN – Iranian Vice President for Executive Affairs Mohammad Shariatmadari said on Monday that according to a parliamentary ratification, the government is obliged to pay cash subsidies only to needy people in the current Iranian calendar year, which began on March 21.
Registration for receiving subsidy ended on Sunday, April 20.
People were asked to refer to a specific website and apply for receiving cash subsidy.
The subsidy registration website asked people to announce their monthly income if it is below 6 million rials ($235), between 6 million and 10 million rials ($390), between 10 million and 20 million rials ($780), between 20 million and 25 million rials ($980), or it is above 25 million rials.
However, Shariatmadari said only a small percentage of people said their monthly income is above 25 million rials.
“Some had thought if they do not register they will be recognized as rich and ‘some problems’ will be created for them.”
He said, according to opinion polls, 10 percent of people had said they would not register for subsidy.
Shariatmadari said those who have registered will be paid in the current Iranian month of Ordibehesht (April 21-May 21). However, he added, the government will wait until people would withdraw registration, otherwise they will be informed through SMS that their subsidy will be cut.
Over $54b have been paid to people in cash subsidy
He said since the cash subsidy payment was introduced in December 2010 more than 1,380 trillion rials (about $54.1 billion) have been paid to people.
To pay monthly cash subsidies the government of Mahmoud Ahmadinejad faced problems and this has continued until today.
Some economic experts say cash payment to people was wrong policy.
“Every month we faced budget deficit due to payment of subsidies,” the vice president said.
Shariatmadari also said the administration of President Hassan Rouhani started its work in a very difficult situation and it had to take proper decisions.
Before Rouhani took over as president in last summer sanctions resolutions were being introduced against Iran and this approach, which was “wildly” affecting the people’s livelihood, had to be stopped.
When the government started its work the inflation rate was 42 percent and the government vowed to reduce it to 35 percent by the end of the last Iranian calendar year (March 20).
According to the central bank, the inflation rate fell to 34 percent in March.
He expressed hope that as the president had said the inflation rate would decrease to 25 percent in the current year.
The Ahmadinejad administration 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.
Prices of gasoline, diesel, and CNG to be announced soon
Shariatmadari, a trade minister in the government of president Mohammad Khatami, said that the government will announce increase in prices of gasoline, diesel, and CNG by Friday.
The government should take into consideration the livelihood of people in the second phase of the subsidy reform, he noted.
“We should start our activity with a mild slope.”
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