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Second phase of Iran's subsidy reform plan suspended

Source: Press TV

One hundred seventy-nine MPs voted in favor of halting the second phase of the subsidy reform plan during a parliament session on Sunday. There were 17 votes against and 20 abstentions on the bill.

MPs believe the improper implementation of the first phase and the current economic conditions of the country are among the main factors behind the decision to postpone the implementation of the second phase of the subsidy reform plan.

The recent fluctuations in the rate of foreign currency, which had affected the prices of many goods and products in the past couple of weeks, also concerned the MPs, although the foreign currency market is now on rebound level and the rate of hard currencies has been controlled.

In the second phase of the subsidy reform plan, the government was scheduled to increase the energy prices in five years, with low-income families compensated with direct cash handouts. Iran's government says in the second phase the amount of cash handout to the public will increase in order to keep pace with price hike. Although majority of MPs voted in favor of halting the second phase, some MPs still believe otherwise.

Meanwhile, Iran's government insists that the plan should be implemented; Iran's President Ahmadinejad has repeatedly criticized any move to suspend the implementation of the subsidy reform plan.

The subsidy reform plan was passed by the Iranian Parliament in 2010. It is the "biggest surgery" of the nation's economy in half a century. The subsidy reform plan is the most important part of a broader Iranian economic reform plan.

... Payvand News - 11/15/12 ... --

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