Azerbaijan , Baku, April 8 / Trend, A.Yusifzade /
Iran's new budget (March 2011-2012) allocates roughly $38 billion on direct cash handouts for implementing the Subsidy Reform Law, IRNA reported quoting the Member of Majlis (Parliament) Planning and Budget Commission Jafar Ghaderi as saying.
According to Ghaderi, Iran's new budget allocates $60 billion for subsidies, including state expenditures - 10 percent, p roduction support - 30 percent and direct cash handouts - 60 percent
The new budget settles oil price at $80 per barrel and fixes the rate of the US dollar at 10,500 Iranian rials.
Iran's new budget totals $539 billion, or by 46 percent more compared with the budget of the last Iranian calendar year that was about $368 billion. The government's policy to reduce subsidies contributed to the increase in budget revenues.
The total budget figure is divided in two parts. The budget for state-affiliated companies is $362 billion and the draft budget is around $177 billion.
On February 20, 2011 the government of President Mahmoud Ahmadinejad submitted the budget bill to Majlis for the upcoming fiscal year.
The specialized committees review lawmaker's suggestions and give a report to Majlis Budget Integration Committee within 10 days. Majlis Budget Integration Committee, which includes two members of the specialized committees, should discuss the budget bill within 15 days and provide its final report for delivering at the open session of Majlis. It takes a few days for lawmakers to discuss the final bill for approving it.
The approved budget sends to Iranian Guardian Council, whose approval is needed for the bill to become law. One of the reasons behind this year's budget hike is the implementation of the targeted subsidy plan, which was launched in December 2010.
The plan aims to gradually remove all subsidies over a five-year period and instead give families cash handouts as compensation. It eliminates subsidies on gasoline, natural gas, electricity and food and is considered to be one of the most important economic undertakings in Iran's modern history.
The Fifth Development Plan was communicated to the parliament after the difference between the Guardian Council and the parliament was resolved in the Experts of Assembly.
The Fifth Development Plan (2010-15) sets the guidelines for the socio-economic development of the country over the next five years. The five-year plan is part of "Vision 2025", a plan for long-term sustainable growth. Each year, after approval of the government's annual budget, the Central Bank of Iran presents a detailed monetary and credit policy guideline to the Money and Credit Council (MCC) for approval.
Thereafter, major elements of these policies are incorporated in the five-year economic development plan. The target is self-reliance by 2015 and the implementation of an ambitious economic reform plan, which includes subsidy, banking, taxation, currency, infrastructure, social justice and productivity as its main focus.
By removing energy subsidies, Iran intends to make its industries more efficient and competitive with that of the world. Other main objectives of the Fifth Plan are making improvements in public healthcare, and expanding international relations.