The Iranian government announced today that 60 million Iranians will start receiving monthly cash payouts of 40,500 toumans, about $40. The payments will start in eastern provinces on Tuesday and within five days would be rolled out in all provinces.
The payouts, part of the government’s new “targeted” subsidiary reforms, are to compensate citizens for the rise in inflation rate after the current subsidies in energy sector are ended by next week. The food subsidies will also be phased out in near future. The government has not explained why 14 million Iranians would not receive any cash payouts (Iran has a population of nearly 74 million). The government is apparently classifying these 14 million people as well to do, not in need of cash payout.
The monthly cash payout of $2.4 billion in itself is expected to add to the inflation rate.
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ReplyDeleteIf the total given out is less than the subsidies, it should not lead to inflation.
ReplyDeleteNote: Anon 5:40 AM comment was advertising for an online TV network. We delete all ads posted under the guise of comment!
ReplyDeleteDon Cox, the issue here is not the budget balance that would compare the government expenditure on subsidies vs. cash payouts. It is the inflation rate. The $2.5 billion in cash payouts each month are spent in an entirely different manner and by different segments of the population than the public expenditure on energy products.
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ReplyDeleteI kind of like how the subsidy removal plan will work. It will give money to each family that was before going to reduce their electricity bill. Now a family of three will be getting 120 dollars extra, yet have a higher bill each month. Now they can choose to live like before and use one of the worlds highest energy usages per capita in the world, or they can choose to use less energy and spend the money on other things of their choosing. All in all a win win for all. Country can progress as more efficiency is introduced and families have more disposable income to play with.
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ReplyDeletetheire is few reason this plan will work let go back in revolution time ayatolah kommani has said the amount of oil price should give to people after 30 years this come to reality this is the bigest step in the history of iran that ahmadinajad bring it to law and order at this priod of time, secondly the money flow in market will increase the power of spending of people much higher and ecconomy will move forward withought any government deficit ever appear and i believe they are will prepeard with inflation by calculating every step of it thirdly boost the level of ahamdynazad government in the history of iran presidency ever.
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