Majlis Limits Subsidy Reforms

The Iranian Majlis today severely limited the government’s subsidy reforms by slashing the savings to be generated from removing government subsidies by more than half. President Ahmadinejad, the champion of the reforms, had planned to save the government some $59 billion in the first year of the program. The Majlis using the week-long absence of Ahmadinejad from the political scene limited the savings to $28 billion. The parliamentarians feared the rapidly rising inflation rate and saw the removal of energy and food subsidies as main culprit.

There were no immediate comments from the office of the president on the latest Majlis move against Ahmadinejad and his programs. On Friday, the Governor of Tehran, speaking on behalf of Ahmadinejad's government, had said the subsidy reforms will contiunue unabated.