Jul 7, 2014, 8:07 PM
News Code: 2720576
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Subsidy Reform Plan's aftermath

Tehran, July 7, IRNA -- The implementation of the first and second phases of the Subsidy Reform Plan has widened the social divide and made Iranians poorer, the Ministry of Economic Affairs and Finance declared in a report.

Tuesday edition of the English language newspaper Iran Daily wrote that the latest studies on the plan's effects show the economic leverage of families declined by 25 percent and pushed 31 percent of families under the poverty line, based on the report.

The Iranian society suffered economically from the very moment former president Mahmoud Ahmadinejad appeared on TV screens and announced that subsidies are the right of Iranians.

President Hassan Rouhani's government is critical of the damage caused by the multibillion dollar subsidy program to Iran's ability to invest in projects vital for national development and economic growth.

For the same reason, people were encouraged to forego cash subsidies. The plan had no advantage, except that the government had to take loans from the Central Bank of Iran and curtail funds to production and industrial sectors.

However, the worst of all reasons is that it made some people dependent on the cash subsidy.

The report also notes that till 2006, almost 25 percent of families lived below the poverty line, which figure has presently risen to 31 percent.

New researches show that although the rise in prices in the US reduced the number of poor people, it led to a rise in the number of poor people in Iran.

The gap between buying and renting one square meters of an average apartment has increased by 41 times after the program was implemented.

The Subsidy Reform Plan not only hurt the country's economic growth, but also worsened the conditions of poor people.