|Cash subsidy payments will only go to low-income families, Iranian MPs decide||
TEHRAN – On Monday, Iranian MPs approved a clause in the national budget bill for the next Iranian calendar year, which starts on March 21, according to which cash payments in the second phase of the subsidy reform plan will only be given to low-income families.
The parliament gave the administration authority to decide the amount of cash subsidy payments that will be given to the target groups.
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.
Currently, 45,500 rials (about $18) is paid to Iranians to compensate for a partial cut of subsidies for fuel and some other basic commodities.
According to next year’s national budget bill, cash subsidies will only be paid to families whose annual income is below a level which will be determined by the government.
It is estimated that the government will acquire 480 trillion rials (about $19.3 billion) in Iranian calendar year 1393 (March 2014-March 2015) in revenues through the implementation of the second phase of the subsidy reform plan.
425 trillion rials (about $17.1 billion) has been earmarked for subsidy payments in cash and in kind.
The national budget bill has also allocated 100 trillion rials (about $4 billion) for supporting domestic production, expanding public transportation systems, and implementing energy saving projects.
In addition, 20 trillion rials (about $804 million) has been allocated for unemployment funds and 48 billion rials (about $1.9 million) for the health sector.
In November 2013, President Hassan Rouhani's chief of staff, Mohammad Nahavandian, said the administration would not cut cash subsidies to rich families since identifying such families would be a kind of breach of their privacy.
“There are two substitute methods. The first is that the affluent families voluntarily stop receiving the subsidies. And the second is that the administration creates more jobs for people,” Nahavandian said.
Majlis Economic Committee Chairman Gholamreza Mesbahi Moqaddam recently said the subsidy reform plan has created $13 billion more in liquidity than was anticipated.
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