EghtesadOnline: President Hassan Rouhani is scheduled to submit the budget bill for the next fiscal (March 2019-20) to the Iranian Parliament on Tuesday.
The budget bill was unveiled by the Plan and Budget Organization of Iran on Budget Day (Dec. 6) in time, but was returned to PBO for revision on the order of Leader of Islamic Revolution Ayatollah Seyyed Ali Khamenei.
A decline in government spending and the economy’s reliance on oil revenues were reforms suggested by the Leader when revising the budget bill, Mehr News Agency reported citing informed sources.
“The Leader has called for lowering government spending as per the country's law, upholding the principles of 'Resistance Economy' and reducing the economy’s reliance on oil revenues when revising the budget bill,” Financial Tribune quoted Parliament Speaker Ali Larijani as saying.
The idea of 'Resistance Economy', first proposed by the Leader, is to reinforce and shield the domestic economy from external shocks by promoting domestic production and self-sufficiency.
“With sanctions placed on the country, addressing the immediate needs, including public employees’ salaries and employment, should take center stage in drawing up the budget. The Leader believes that operating expenses need to be cut and instead the country’s budget should be channeled into improving economic growth and investment,” Larijani added.
A key part of US sanctions against Iran aims to restrict crude sales, which supply a substantial percentage of the budget’s revenues.
From overall oil sales, the law says, the government is obliged to pay 14% to the National Iranian Oil Company and 34% to the National Development Fund of Iran.
NDFI, which is independent of the government, was founded in 2011 as Iran's sovereign wealth fund. The goal was to help save money when government earnings are high, especially from oil and gas exports.
The fund lends to both public and private firms in need when government revenues are down, especially during low oil prices.