Azerbaijan, Baku, Oct. 30 /Trend, N. Umid, S. Isayev
Advisor to Iranian president Hassan Rouhani, Akbar Torkan has announced that about 52 percent of cash subsidies' sources are legal, while the remaining 48 percent is considered illegal.
The legal source of cash subsidies comes from increasing energy carriers` price in Iran.
About 34 months ago, ex-president Mahmoud Ahmadinejad started implementation of subsidy reform plan.
According to the plan, administration should gradually cut subsidies of energy carriers, food, etc and pay direct "cash subsidies" to people. The first round of implementation started on December 19, 2010.
ISNA news agency quoted Torkan yesterday, as saying that according to the law, assets which are saved from implementation of subsidy reform plan should be used to pay cash subsidies to Iranian citizens at 50 percent, 30 percent allocated to production enterprises, and 20 percent spent for government's public expenses.
He went on to note that while about three years left behind the implementation of the subsidy reform plan, shares of production enterprises and government's public expenses have not yet been paid.
It is while, the allocated money to direct cash subsidies is about two-fold more than saved money from implementation of the plan, he added.
Commenting on administration's saved money value due to implementation of the plan, Torkan said that, government saves 18 trillion rials (about $722 million based on official rate of 24,919 rials per each USD) monthly, while it pays 35 trillion rials (about $1.4 billion) as cash subsidy to families every month.
Paying cash subsidies was former administration's priority, so all of government's resources are mobilized to pay the cash subsidies, he stated, emphasizing that the former administration neglected other parts of the subsidy reform plan.
Ahmadinejad's administration used some bank assets, public budget and assets allocated to constructive projects as well as selling steel factory in Hormozgan Province to pay cash subsidies, all of which are considered illegal.
On October 24, Iranian Economy Minister Ali Tayyebnia said that, implementation of subsidy reform plan has imposed some 100 trillion rials (about $4 billion) deficit in the current year's budget.
Commenting on the future of the cash subsidies` payment, Torkan stated that decreasing amount of cash payments is impossible, and it would lead to social tensions, adding that administration won't be able to convince people on the made decision.
He also stated that, if energy carriers` price increased by 38 percent - which was approved by Iranian parliament - then the public opinion will conclude that administration only increases price without any new profit for people.
The Iranian parliament and administration have agreed to finalize cutting cash subsidies of some high-income Iranian families by the end of the current fiscal year (March 2014).
The subsidy reform plan's incomes and costs will be balanced If administration cuts cash subsidies of reach families and increase the energy carriers` price, Torkan said.
On October 28, Ali Tayyebnia remarked that, less than half of the incomes which Ahmadinejad's administration predicted for current year's budget, have not been materialized.
He underlined that only some 1000 trillion rials ($40.1 billion) from 2100 trillion rials ($84.27 billion) of predicted assets in budget can be realized till the end of current solar year ( will end on March 21, 2014).
It means that, budget's total assets would not meet government's current expenditures, worth 1280 trillion rials(about $51.37 billions), he added.
