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Ninety-five pct of Iranians prefer handouts to state projects

TEHRAN: Ninety-five percent of the Iranian population signed up to a cash handout program, dealing a blow to the government which wanted to spend the money elsewhere, a top official said Wednesday.

Mohammad Baqer Nobakht, vice president for management and development, said that 73 million out of the country’s 77 million people had opted to receive the $14 monthly payments.

The country’s government employed celebrities in a media campaign to discourage families from taking the handouts.

The International Monetary Fund is among global institutions encouraging the Islamic Republic to drop subsidies and increase prices to regulate its economy after years of ongoing sanctions.

However, Nobakht said that only 2.4 million people – 3 percent – chose to waive the cash payments, which aim to provide help in paying energy and utility bills as well as basic food costs.

He did not account for the remaining 1.6 million people, but was quoted by official IRNA news agency as saying the dropouts would free up $360 million per month for infrastructure, manufacturing and public transport investment.

Under the second phase of a subsidy program – details of which the government says will be released later this week – the price of gasoline is also expected to rise.

The original handout scheme was launched in December 2010, aiming to offset the slashing of earlier subsidies, which fueled inflation against a backdrop of mismanagement and international sanctions targeting Iran’s ailing economy.

Tackling inflation is a priority for the Tehran government and the annual rate has fallen from 35 percent when President Hassan Rouhani took office in August, to 32 percent last month.

But new subsidy cuts are expected to push up inflation, at least temporarily, analysts say.

 
A version of this article appeared in the print edition of The Daily Star on April 24, 2014, on page 5.

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Summary

Ninety-five percent of the Iranian population signed up to a cash handout program, dealing a blow to the government which wanted to spend the money elsewhere, a top official said Wednesday.

However, Nobakht said that only 2.4 million people – 3 percent – chose to waive the cash payments, which aim to provide help in paying energy and utility bills as well as basic food costs.

Tackling inflation is a priority for the Tehran government and the annual rate has fallen from 35 percent when President Hassan Rouhani took office in August, to 32 percent last month.


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