Source: Tehran Times
The Iranian parliament (Majlis) approved a bill on Sunday that allows the administration to pay cash subsidies as much as the past at least by the end of the current Iranian calendar year (March 20, 2014). MPs approved the bill with 125 votes in favor, 51 against, and six abstentions.
cartoon by Salman Taheri, Sharqh daily
The subsidy reform plan pays 45,500 rials (about $18 based on the U.S. dollar official exchange rate of 24,800 rials) to Iranians, eliminating subsidies for fuels and some commodities.
This is while the budget and planning committee of the Majlis approved on October 20 stopping 30 percent of cash subsidy payments.
On October 19, the Central Bank of Iran Governor Valiollah Seif said that the Majlis and the administration will finalize an agreement by the end of the current Iranian calendar year to cut cash subsidies of rich families.
"People have well understood the need [to cut the cash subsidies]. The basis for doing the job has been prepared in the society," the Mehr News Agency quoted Seif as saying.
Head of Parliamentary Economic Committee Gholamreza Mesbahi Moqaddam has said the subsidy reform plan put into place by the government has created $13 billion more in liquidity than was anticipated.
MP Ahmad Tavakkoli has criticized the current method of cash subsidy payments, saying that paying subsidies in cash to people is carried out just in Iran. Paying cash subsidies to all groups of people with different incomes should be revised given that the administration is facing budget deficit.
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