Iran cuts subsidies
The Iranian government and parliament have agreed to cut current public subsidies by about $1.5 billion in the next Iranian calendar year (starting Mar. 21).
The Iranian legislative and executive bodies agreed to cut
subsidies going to high-income individuals. Accordingly, subsidies
to 10 million people will be stopped, Tasnim news agency
reported.
As a result, subsidies to those earning more than $720 a month will
be cut starting from the mentioned date. It still remains to be
decided whether the mentioned sum falls on the whole family or just
income of the head of the family.
Earlier Hassan Rouhani announced that the government spends about
$1.4 billion (based on then official rate of 25,500 rials per each
USD) per month on the cash subsidies for citizens.
The cash subsidies impose about $392 million deficit in the budget
per month for administration, he noted.
The administration of former president Mahmoud Ahmadinejad
implemented the first stage of the subsidy reform plan toward the
end of 2010.
The subsidy reform plan is aimed at easing pressure on state
finances by cutting tens of billions of dollars from government
subsidies on food and fuel. The government pays cash to citizens as
compensation for increased prices by cutting subsides.
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