Tuesday, March 1, 2011

Monthly Cash Subsidies: Lowered or Ending Soon?

Iran’s Ministry of Economy denied reports that the popular monthly cash subsidies paid to more than 80 percent of the population to cope with the removal of government subsidies would be slashed by 40 percent to $27 a month starting with the second month of the coming Iranian new year of 1390 (the new year starts on 21 March). At present monthly cash payouts are at $44 per month per person.

The controversy started yesterday when the ministry itself announced that its budget for cash subsidies for the eleven months of the new calendar year is at $19.3 billion. Considering that 65 million people will be eligible to receive cash subsidies next year, the monthly cash payout per person per month comes to $27, and not $44! Unless the government is planning to end these payments in seven months, in which case it would need only $19.3 billion. So the apparently contradictory announcements are perhaps meant to convey the message that these payments will end sooner than expected.

3 comments:

Anonymous said...

I think it is to do with the fact that they want to reduce the number of people who are getting the payments. Not all of the 65 million people need the money.

Anonymous said...

Ending subsidies is long overdue. Iranian population has accepted this as its diversified economy can now stand on its own feet. The low key public response to the gradual end to subsidies attests to the fact that Iranians understand the negative impact of subsidies on the economy.

Iranian economy is now more stable and diversified.

IBOLYA said...

I think that the 80 percent of the eligible people is to much, its inevitable to reduce this sooner or later.