The government is on a daily basis spending 1,500 billion rials in cash handouts saved through its annual earnings from the implementation of the Subsidy Reform Plan, said Deputy Minister of Economic Affairs and Finance Mir Saeed Nikzad Larijani on Friday. “The road construction’s share of the plan is just 160 billion rials per day, while water receives 115 billion rials,” the official said, warning that such a trend may create “serious problems” as the money being spent on industries is too low. In December 2010, the Ahmadinejad administration began cutting subsidies on energy carriers, in an effort to shave billions of dollars off the government annual spending. The savings were to be spent on cash handouts to Iranian citizens and the manufacturing sector. However, the second phase of the controversial plan was left for the Rouhani administration to implement, though many economists believe that paying cash to nearly 80 million Iranians is not a true way to distribute wealth. Nikzad Larijani said that the cash assistance must be “limited and conditional,” calling on officials to pay more attention to the manufacturing sector at the time when the economy is garbling with fragile recovery. President Hassan Rouhani vowed during his 2013 presidential campaign to ease the economic hardship caused by macroeconomic mismanagement of the previous government and western sanctions imposed on the economy over a lengthy nuclear dispute.
