Subsidy reform plan allocates $7.6b to support domestic production

May 15, 2021 - 14:31

TEHRAN – Managing Director of Iranian Organization of Targeted Subsidies has said that 320 trillion rials (about $7.61 billion) of the revenues earned from the government’s subsidy reform plan has been allocated for supporting domestic production in the current Iranian calendar year (started on March 21).

Referring to the need to support production and improve the employment of youth in the year which has been named the year of “Production: Support and Elimination of Obstacles” by the Leader of the Islamic revolution Seyed Ali Khamenei, Omid Hajati said the priority for the allocation of the mentioned resources would be for development projects and export-oriented production units.

The Iranian targeted subsidy plan, also known as the subsidy reform plan, was passed by the Iranian parliament on January 5, 2010.

The government has described the subsidy plan as the "biggest surgery" to the nation's economy in half a century and "one of the most important undertakings in Iran's recent economic history".

The goal of the subsidy reform plan is to replace subsidies on food and energy (80 percent of total) with targeted social assistance, in accordance with the country’s Five-Year National Development Plan.

According to the government, approximately $100 billion per year is spent on subsidizing energy prices ($45 billion for the prices of fuel alone) and many consumable goods including bread, sugar, rice, edible oils, and medicine.

Since the U.S. re-imposed sanctions on Iran to pressure the country’s economy, Iran has been taking all necessary measures to mitigate the impact of the sanctions and counter the U.S. actions.

Improving and boosting domestic production has been one of the major strategies that Iran has been following in the past two years in order to increase its independence and boost non-oil exports.


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