|Subsidy savings to boost healthcare, public transport: Rouhani||
TEHRAN – Iranian President Hassan Rouhani says his government will spend revenues it gains from implementing the second phase of the subsidy reform plan to improve the public health and transport services.
In an interview with state TV on Tuesday night, Rouhani said the administration will also channel the revenues into domestic production sectors and environmental protection programs.
For instance, the number of pharmaceutical products which are under medical insurance coverage will be increased from 200 to about 350, and the quality of healthcare and treatment services will be improved noticeably as of May 5, he added.
“All Iranians will come under the umbrella of insurance services,” Rouhani stated, without elaborating.
The inflation rate has plummeted by around 24 percent since the administration took office in August 2013, which means people have maintained their purchasing power, he explained.
On April 25, the Iranian government announced gasoline price hikes as high as 75 percent, officially starting the second phase of the subsidy reform plan.
The government’s goal is to eventually liberalize all energy prices and reduce energy consumption, which far surpasses the global average.
A clause in the national budget bill for the current Iranian calendar year, which started on March 21, calls for steep price increases to save 630 trillion rials (about $25.3 billion) annually in subsidy payments.
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.
In the first stage, the government paid 455,000 rials to citizens to compensate for a partial cut of subsidies.
The plan was devised to release government money for production and infrastructure projects in order to improve efficiency and bolster the economy.
In April, Mohammad Kordbacheh, an advisor of the Iranian president, said that the implementation of the second phase of the subsidy reform plan would not lead to a sharp rise in the inflation rate.
Although fuel prices rose by 600 percent in the first phase of the plan, the inflation rate only increased by 10 percent, Kordbacheh said.
“Fuel prices are… to be increased by 60 percent on average. Therefore, it will not lead to a hike in the inflation rate,” he added.
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