TEHRAN -- Baradaran Shoraka, the economic deputy of the Management and Planning Organization announced that with the approval of the Budget Supervising Committee (BSC), more than 96 percent of the current budget, and 93 percent of the development budget will be allocated in the current Iranian calendar year (started March 21).

In an interview with the Central News Beurea, he referred to the extensive economic reforms such as, the establishment of a single exchange rate for the Iranian rial against the U.S. dollar, and the reform of tax laws.

He said, due to the special nature of the budget this year and considering that forecast revenues did not materialize last year, President Khatami ordered the setting up of BSC. It is comprised of the First Vice President, the Finance and Economic Affairs minister, the Commerce minister, and the Director of Management and Planning Organization. BSC has so far convened a few sessions in the presence of the President.

Shoraka stated that BSC's main task is to study the budget as far as government revenues, expenses and appropriate decision making is concerned.

The First Vice President has notified one of the approved articles of BSC to all ministries and government organizations.

It stresses concerted efforts by all parties, specially the Finance and Economic Affairs Ministry, the Commerce Ministry, the Management and Planning Organization, and the Central Bank of Iran for the realization of predicted government revenues and maximum allocation of funds towards planned spending.

In reply to a question regarding the realization of predicted tax revenues for this year he said, "In this year's budget it was aimed to increase tax revenues by 25 percent, but according to the Management and Planning Organization this target has not been achieved yet. So it is forecast to raise 59,523 billion rials instead of 62,415 billion rials through taxation".

Shoraka put this year's approved current government spending at 155,635 billion rials, saying that BSC's proposal however is to spend 150,510 billion rials. This represents current budget allocation of 96.7 percent.

He stated this year's approved development spending as 54,987 billion rials, adding that BSC's proposal is to allocate 51,173 billion rials representing 93.1 percent of that forecast in the budget.

The Management and Planning Organization predicted a shortage of 9 billion rials in government revenues, showing realization of 96.3 percent of the anticipated figure in the budget.

In response to delaying payment of development funds, he said "It is usual to encounter delays in allocation of development funds in the first few months. This is due to the drawing up of agreements by government bodies and required studies undertaken by the Management and Planning Organization (MPO).

But this year by presidential decree, the MPO and all executive branches are required to speed up their procedures and offer their agreements.

So far satisfactory results have been obtained".

Shoraka provided a positive assessment with reference to the approved allocation of provincial budget. He said that 44 percent of the current provincial budget has been allocated so far, and the go-ahead with allocating all of the provincial development fund has been given.

He expressed that all efforts are being directed towards allocating 100 percent of this fund.

In response to government's plans to fund the budget deficit in order to compensate any shortages in expected revenues he said, "The government will do all it can to realize anticipated revenues. But if it all fails, the government will adopt a 10 percent reduction in current expenses to remove the budget deficit".

Shoraka declared that the government has no alternative but to economize.

Otherwise it has to borrow from the Central Bank of Iran to compensate the budget deficit, in which case higher inflation will result.

He referred to the inefficiency in planning the annual budget and iterated that to reform the system, the entire activities of government bodies must be defined and appropriate funding considered. The budgeting requirements will also depend upon their type of activities and performance, he added.