EghtesadOnline: Despite government efforts to minimize the deficit in March 2022-23 budget, numbers seen in the fiscal budget show a deep gulf between income and expenditure.
According to Hadi Qavami, a deputy at the Economy Ministry, the deficit in the next fiscal budget is expected around 3,000 trillion rials ($11 billion).
Qavami said the shortfall is way lower than the deficit in the present fiscal year. “The budget deficit next year is not expected to increase next year…Rather it should decline by 1,500 trillion rials ($5.5 billion) compared with present fiscal year,” he was quoted as saying by IBENA.
The operating balance in a budget is calculated by deducting the government’s revenue (excluding income from gas and oil export) from its operational expenses. Deficits occur when expenditure surpass revenue.
Those drafting the budgets have always emphasized the need to mobilize to minimize the deficits. Drawing parallels between the present and next fiscal budgets, the head of the Majlis Joint Commission, Hamid Reza Haji-Babaei, has made an overall positive evaluation of the next budget, but concurred that “in some cases the government may have to borrow to cover the deficits”.
In the next fiscal year (starting March 21), the operating budget (including revenue from taxes and exports) has been projected at 13,720 trillion rials ($50.8 billion).
Revenue from ministries and government institutions are estimated at 1,332 trillion rials ($4.9 billion). Put together, the total general budget is the region of 15,052 trillion rials ($55.7 billion).
The budget for state companies, banks and for-profit organizations is forecast at 22,314 trillion rials ($82 billion).
Mehrdad Bazrpash, head of Iran’s Supreme Audit Court, the supervisory arm of the parliament, said the government can plug its deficit holes by selling assets, namely its shares in companies or real estate.
In a meeting with members of the Majlis Economic Commission earlier in the week, Bazrpash said the government is potentially capable of selling assets worth 2,000 trillion rials ($7.4 billion) next year, the parliamentary news agency ICANA reported.
In its appraisal of the next budget, the Majlis Research Center pointed to overestimation of projected tax revenue as ambitious and a major drawback.
The government expects to make 5,270 trillion rials ($19.5 billion) in taxes next year -- 62% higher than the amount seen in the current year.