Financial Tribune – The Iranian Parliament, also known as Majlis, rejected the outlines of the upcoming fiscal year’s (starting March 20, 2020) budget bill on Monday.
The legislators cast 67 votes for and 114 votes against, while three abstained from voting, IRNA reported.
“The bill has to return to the government and then reviewed by the Joint Commission [before coming back to the open session of the parliament],” first vice speaker of the parliament, Masoud Pezeshkian, was quoted as saying, adding that the budget bill’s passage will have to be shouldered by the next parliament.
The joint commission is a parliamentary body responsible for reviewing the budget bill as well as five-year development plans proposed by the government before it is put to a legislative vote.
Iranians went to polling stations to cast their votes on Friday in the 11th round of parliamentary elections.
The final results indicate that principlists have won an overwhelming majority in the parliament and have swept all seats of the key Tehran constituency.
In several constituencies, the election has gone on to a second round set for April 17. The first session of the new Majlis is scheduled to convene on May 28.
The other major political camp, namely the reformists, whose campaign was marred by mass disqualifications by the electoral watchdog, will only form a tiny minority in the conservative-controlled legislature.
The Majlis Joint Commission had initially approved the outlines of the bill on Dec. 25.
“To avoid running a deficit in next year’s budget, the joint commission has decided to reform overestimations when reviewing revenue details and reduce expenses,” Hadi Qavami, spokesman of the commission, has been quoted as saying.
The parliament-approved budget needs the final endorsement of the Guardians Council—the body in charge of ascertaining the constitutional and Islamic nature of all laws.
As per the proposed bill, the next fiscal year’s operating budget (revenues mainly from taxation and exports at the immediate disposal of the government) stands at 4,845 trillion rials ($31.66 billion at the market exchange rate of 153,000 rials per dollar).
This is in addition to revenues exclusive to ministries and governmental institutes amounting to 792 trillion rials ($5.17 billion), which make up the total sum of the general budget: 5,638 trillion rials ($36.84 billion).
The budget of government companies, banks and for-profit organizations has been put at 14,839 trillion rials ($96.98 billion).
All in all, the ceiling set for the government’s total budget is at 19,887 trillion rials ($129.98 billion).
The government’s operating budget for the upcoming fiscal year as part of the bill indicates an 8% expansion compared with the corresponding figure of the current year’s budget law.
Yet, it’s noteworthy to consider the inflation in Iran. The Statistical Center of Iran’s latest report shows the average goods and services CPI in the 12-month period ending Nov. 21 increased by 41.1% compared with last year’s corresponding period.
Having said that, the next year’s budget will be contractionary.
The budget bill has come under fire for alleged overestimations on the side of revenues and failure to cut spending, especially since government finances have come under immense pressure due to the imposition of US sanctions since last year.