Rouhani ad­min­is­tra­tion faces no bud­get deficit de­spite un­ful­filled in­come tar­get

Iran Daily - - Domestic Economy -

An assess­ment of the Ira­nian gov­ern­ment’s fi­nan­cial con­di­tion dur­ing March 21-De­cem­ber 20, 2017, shows that although the Rouhani ad­min­is­tra­tion has failed to ac­quire more than $8.1 bil­lion in pre­dicted mon­e­tary re­sources, its fig­ures are not in­dica­tive of a bud­get deficit.

The gov­ern­ment’s rev­enues dur­ing a fis­cal year (start­ing mid-march) de­pends on three main pub­lic sources: 1. Taxes, 2. Rev­enues gen­er­ated from ex­ports of oil and its byprod­ucts and 3. The hand­ing over of fi­nan­cial prop­er­ties mostly in the form of is­su­ing bonds. For the year to mid-march 2018, the gov­ern­ment had pre­dicted a rev­enue of $70.61 bil­lion from the pub­lic re­sources and had planned its bud­get ac­cord­ingly.

It was stip­u­lated in the ap­proved bud­get bill for the year to March 2018 that the gov­ern­ment would earn $35.51 bil­lion from taxes as well as its other in­come sources, $24.28 bil­lion by ex­port­ing oil and its byprod­ucts and $10.81 bil­lion by hand­ing over fi­nan­cial prop­er­ties. There­fore, the gov­ern­ment ap­proved to earn $26.85 bil­lion from taxes and its other in­come sources, $18.36 bil­lion from sell­ing oil and its byprod­ucts in for­eign mar­kets and $10.95 bil­lion from con­ced­ing its prop­er­ties dur­ing the nine-month pe­riod to De­cem­ber 20, 2017.

A re­port by the Cen­tral Bank of Iran on the gov­ern­ment’s per­for­mance dur­ing March 21-De­cem­ber 20, 2017, in­di­cates that out of its to­tal pre­dicted in­come, the Rouhani ad­min­is­tra­tion only man­aged to earn $19.44 bil­lion from taxes and $13.06 bil­lion by ex­port­ing oil and its byprod­ucts, show­ing deficits of $7.34 bil­lion and $5.3 bil­lion, re­spec­tively. This is while, as per the in­come per­tain­ing to the hand­ing over of the prop­er­ties, a sur­plus of $4.08 bil­lion was ac­quired, in­di­cat­ing that the gov­ern­ment had ex­ten­sively is­sued bonds.

As per the gov­ern­ment’s ma­jor ex­pen­di­tures, there are two main ex­penses: 1. Pay­ing wages and salaries and 2. Al­lo­cat­ing de­vel­op­ment bud­gets. For the year to mid-march 2018, the Rouhani ad­min­is­tra­tion ap­proved $51.79 bil­lion for its cur­rent ex­pen­di­tures, $14.48 bil­lion for al­lo­cat­ing de­vel­op­ment bud­gets and $4.28 bil­lion for own­ing fi­nan­cial prop­er­ties.

Thus, the gov­ern­ment should have spent $39.18 bil­lion on its cur­rent ex­pen­di­tures, $11.02 on de­vel­op­ment bud­gets and more than $3.26 bil­lion on pos­sess­ing fi­nan­cial prop­er­ties dur­ing mid-march-mid-de­cem­ber, 2017. This comes as the Rouhani ad­min­is­tra­tion’s per­for­mance dur­ing the same du­ra­tion in­di­cates that it has spent only $33.36 bil­lion on its cur­rent ex­pen­di­tures, which is $6.12 bil­lion less than the ap­proved amount.

In ad­di­tion, as far as the de­vel­op­ment bud­gets are con­cerned, dur­ing the nine-month pe­riod to De­cem­ber 20, the gov­ern­ment’s al­lo­cated amount is $4.69 bil­lion less than the ap­proved fig­ure, stand­ing at $6.12 bil­lion. How­ever, the amount spent on pos­sess­ing prop­er­ties in this pe­riod al­most equals the ap­proved fig­ure of $4.4 bil­lion.

In gen­eral, out of the to­tal $70.61 bil­lion worth of fi­nan­cial re­sources pre­dicted for the year to mid-march 2018, some $53.26 bil­lion should have been ac­quired dur­ing the ninemonth pe­riod to De­cem­ber 20, 2017. How­ever, the gov­ern­ment’s per­for­mance in this pe­riod in­di­cates that only $44.69 bil­lion ma­te­ri­al­ized, show­ing a deficit of $8.57 bil­lion com­pared to the pre­dicted amount. On the other hand, to cover the $70.61-bil­lion ex­pen­di­tures, the gov­ern­ment should have al­lo­cated $53.26 bil­lion, whereas, it has only spent $44.08 bil­lion. On the whole, these fig­ures in­di­cate that in the same du­ra­tion, the gov­ern­ment failed to cover $9.38 bil­lion of the ex­penses due to its fail­ure to ac­quire the tar­geted fi­nan­cial re­sources.

Nev­er­the­less, although the gov­ern­ment failed to gen­er­ate its tar­get in­come dur­ing mid-march-mid-de­cem­ber, 2017, it did not face a bud­get deficit. This comes as Ira­nian states­men have re­peat­edly an­nounced that the gov­ern­ment will not face a bud­get deficit in the year to March 2018.

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