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Ahmadinejad's Government Retracts Income Bracketing Scheme

By Nazanin Kamdar, Rooz Online

The wave of concern and controversy generated in Iran over the method that has been used to calculate the income brackets of Iranian families has caused Mahmoud Ahmadinejad to retract his plan, claiming that the data provided to it was erroneous. The plan deals with direct payment of subsides to the public.

According to a report by IRNA, Mr Ahmadinejad criticized the government economic team's method of income bracketing and ordered an overhaul of the scheme.

Mohammad Rouyanian, head of the administration's transportation commission, is the source cited by IRNA for the report. According to IRNA, Rouyanian said that part of Ahmadinejad's criticism was directed at placing a some clerks and laborers occupational categories in the third income bracket, noting: "An examination of the income and living standard of a considerable portion of individuals placed in the third income bracket clearly shows that they deserve higher subsidy payments, even though they have been placed in the third income bracket by the predetermined formula of the Statistical Center."

In this connection, the government economics and finance minister who had previously announced that people in the third income bracket would not receive subsidy payments, announced yesterday, "Families who have been placed in the third income bracket according to the subsidy reform bill should not worry, because the law has authorized the government to pay subsidies to everyone in proportion to their income."

According to Mehr news agency, Shamseddin Hosseini added, "In recent days many individuals have approached us expressing concern that they are in the third income bracket and that they were disqualified for subsidy payments. But we will implement the law, and the law has said that everyone will be covered."

Unlike Ahmadinejad, however, Hosseini cited the government's statistical center to be the source that came up with the bracketing criterion used for the subsides. Ahmadinejad, meanwhile, has said that the data contains errors.

On the other hand, some Majlis lawmakers continue to criticize the government's hasty decisions and the inconsistency of its decisions with the subsidy reform bill as passed by the Majlis.

Gholamreza Mesbahi-Moghaddam, who heads the Majlis economic reform committee, told reporters yesterday, "The Majlis will not authorize the 40 thousand billion Toman sum allocated in next year's budget to implement the reform subsidy bill."

Speaking to ISNA, he said that the Majlis will agree to allocate only half that amount, emphasizing that the government's plan would inflict an inflationary shock on the country.

Reza Abdollahi, head of the Majlis planning and budget committee also criticized the government's plan in an interview with reporters and said, "We don't have this issue of income bracketing in the law, and don't know where the government got it from."

Experts believe that the shock resulting from the income bracketing announcement is the main reason behind the government's retreat from the bill, the implementation of which has been consistently criticized by the Majlis.

... Payvand News - 02/01/10 ... --

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