Economy, Domestic Economy

Gov’t to Pay $14.7b as Cash Subsidies

Gov’t to Pay $14.7b as Cash SubsidiesGov’t to Pay $14.7b as Cash Subsidies

Minister of Economic Affairs and Finance Ali Tayebnia on Monday said 1,500 trillion rials ($52.6 billion at official exchange rate) in government debt has so far been identified and documented, adding however that the total government debt is estimated at approximately 2,500 trillion rials ($87.7 billion).

Observing that no official estimate of the government debt has so far been released, the minister said a special secretariat has been formed in the Treasury Department to come up with the exact amount of the debt, IRNA reported.

"While the government earned around 320 trillion rials ($11.2 billion) in revenues from the increase in energy prices, the payment of cash subsidies alone amounted to 420 trillion rials ($14.7 billion) in government spending," said Tayebnia.

The government has envisioned a number of strategies to compensate the budget deficit, said the minister, adding: "Cutting the payment of cash subsidies to high-income households is one such strategy."

As part of the Subsidy Reform Plan, introduced by former president Mahmoud Ahamdinejad and passed by the Parliament on January 5, the government pays cash handouts of about $15 per head on a monthly basis as compensation for cuts in food and energy subsidies.

The parliament recently lowered the cap for the total amount of cash subsidies in the new Iranian year’s budget bill, compelling the government to exclude high earners from the subsidy list.