Iran set to cut cash subsidies for rich families

The Iranian Majlis (parliament) and government will finalize an agreement by the end of the Iranian year (March 20, 2014) to cut cash subsidies for rich families, Tehran Times daily reported on Sunday. Iran's central bank governor Valiollah Seif was quoted by the daily as saying: "People have well understood the need (to cut cash subsidies for affluent groups). The society is prepared for doing the job." According to the report, the move will target three groups of the Iranian society with the highest incomes. In December 2010, the former Iranian government launched a plan to remove all subsidies on consumer goods over a five-year period. Instead, every Iranian citizen gets to be paid 45,500 rials (about 18 dollars) in cash every month. According to the finance ministry, Iran's liquidity reached some 201 billion U.S. dollars under the plan. The Economic Commission of the Majlis said the plan created 13 billion dollars more in liquidity than anticipated. However, analysts criticized the plan as failing to reach its goal of eliminating poverty and discrimination, as it resulted in rampant inflation and unemployment. Due to the West's sanctions on Iran's energy and finance sectors over a controversial nuclear program, the Iranian currency depreciated sharply against foreign currencies in the past year.