AFP — Eight months after taking office, Iranian President Hassan Rouhani has suffered his first major political defeat, with the public overwhelmingly brushing aside appeals to forgo direct government aid.
The 455,000-rial ($14) monthly handout scheme, initiated in December 2010 by Rouhani’s predecessor Mahmoud Ahmadinejad, is part of broader economic reforms aimed at overhauling the country’s massive subsidy system.
The reform — which phases out parts of remaining subsidies on energy, utility bills and basic food costs — is forecast in this year’s budget to save the cash-starved government $18 billion.
Encouraged by economists as a way of regulating Iran’s economy, which is stretched thin with debilitating sanctions and mismanagement, the second phase of the plan started Friday with petrol prices being raised as much as 75%.
The bid to curb expenditure under the separate handout scheme, however, appears to have failed…