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Industries to Receive 12000t Rials From  Subsidy Reform
Economy, Domestic Economy

Industries to Receive 12000t Rials From Subsidy Reform

Industries are to receive a sum of 12,000 trillion rials collected from the implementation of the second phase of the subsidy reform plan, MNA reported Saturday.
“Based on the priorities set by the government, the amount saved through the second phase of the cash handout scheme will be allocated as loans to the most competitive industrial enterprises,” deputy minister of industry, mine and trade, Mohsen Salehinia, said.
He added that the loans will be granted in the form of cash flow, adding, “Applicants will receive the credit until the end of the current year (March 2015) after being approved by the industry ministry as eligible recipients.”
Salehinia said that new criteria has been defined according to which "we can determine whether or not an industrial unit is competitive," adding that those businesses that can help the national economy step out of the current recession will be prioritized.
The subsidy reform plan, which was called "the biggest surgery to the economy" by the government of former president Mahmoud Ahmadinejad, was put into effect in September 2010. Based on the plan, the subsidies on food and energy were supposed to be removed gradually, while the government had planned to allocate a portion of the amount saved to the citizens and the industry sector.
However, the entire government revenue collected through the subsidy reform plan was distributed among the people in the form of cash handouts.
The goal of the subsidy reform plan was to replace subsidies on food and energy (80% of total) with targeted social assistance, in accordance with the Five-Year Economic Development Plan (2011-2016) and move towards free market prices within a 5-year period. The subsidy reform plan was seen as the most important part of Ahmadinejad administration’s broader plan to reform the national economy after Tehran was hit by several rounds of Western sanctions over its nuclear energy program. The sanctions and restrictions mainly targeted Iran's banking system and oil industry.
Earlier this week, it was announced that Iran has earned about $7 billion through implementing the second phase of the subsidy reform plan in the first half of the current year (March 21-September 22).
The Rouhani administration seeks to amend the subsidy reform plan. Last month, First Vice President Es'haq Jahangiri said that the government was left with no option but to continue with the handout scheme "that is the product of another administration.”

 

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