Azerbaijan, Baku, May.6/ Trend F.Karimov/
Iran will not pay cash subsidies for bread in the current Iranian calendar year, which started on March 21, the Mehr News Agency quoted the head of the subsidy reform headquarters Mohammad-Reza Farzin as saying.
Last year, a special sum was paid to people as bread subsidy because prices had risen, but this year the money will not be paid because prices will not be increased, Farzin explained.
In June 2012, Iran paid 280,000 rials (about $23) for nine months as special bread subsidy to the accounts of Iranian families.
The subsidy reform plan pays out 455,000 rials (about $37) to every Iranian, while eliminating subsidies for fuels and some commodities.
Nearly 74.5 million Iranians receive cash subsidies.
When the plan started in December 2010, it was expected to cause about $32 billion in liquidity. But greater demand for the cash subsidies and the government's money borrowed from the central bank to pay for the subsidies led to $45 billion in liquidity.
The government implemented the first stage of the subsidy reform plan towards the end of 2010 in an attempt to wean the country off food and fuel subsidies. At the time, Ahmadinejad called it the "biggest economic plan of the past 50 years".
It has allowed the government to gradually slash subsidies on fuel, electricity, and certain goods over the course of five years, with low-income families being compensated with direct cash handouts.
On January 14, MP Abdolkarim Hashemi told the Fars News Agency that the Iranian administration is facing problem in providing money for paying cash subsidies to the public.
In such a situation, the second phase of the subsidy reform plan could not be implemented, he said, adding that for the time being the government is providing necessary money out of sources other than freeing up prices based on the subsidy reform plan.
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