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Rouhani Disputes Rivals’ Spending Pledges

President Hassan Rouhani speaks during a conference on the knowledge-based economy in Tehran on May 7. President Hassan Rouhani speaks during a conference on the knowledge-based economy in Tehran on May 7.

President Hassan Rouhani said increasing public welfare depends on rising state revenues, chiding electoral promises of multiplying cash payments made by his principlist rivals in the May 19 presidential race.

The government started giving people cash handouts in 2010, under the Subsidy Reform Plan initiated by Rouhani's predecessor Mahmoud Ahmadinejad.

The previous administration removed indirect food and energy subsidies and instead paid every Iranian 455,000 rials on a monthly basis.

Currently, more than 90% of all Iranians receive the direct subsidy, whose real worth has declined from around $45 at the beginning to just $12 now.

Tehran Mayor Mohammad Baqer Qalibaf and custodian of the holy shrine of Imam Reza (PBUH), Ebrahim Raeisi, the two leading challengers to Rouhani's reelection bid, have promised to double or triple subsidies for the have-nots should they win office.

"Shouting slogans is easy, but what matters is outlining detailed plan. Have they ... ever thought where the cash would come from? Whose salary should be slashed? Teachers, nurses or [other] employees? Do they want to borrow it from the central bank?" the president said on Saturday, president.ir reported.

Rouhani said borrowing money from the central bank would usher in inflation and a mistake by Ahmadinejad's administration to finance its Mehr Housing Plan using the central bank resources hiked the inflation rate to above 40%.

"In this government, we insisted on fiscal discipline since day one and did not allow any borrowing. It caused the inflation to decline to single-digit levels," he said.

Subsidy pledges by principlist hopefuls have drawn the criticism of many experts and even prompted interventions by Majlis Speaker Ali Larijani who said on Thursday that the candidates should bear in mind that devising the subsidy policies is under the authority of the parliament and not the government.

Larijani also said that in view of the country's economic situation, the government cannot increase cash handouts.

 

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