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Iran body approves state budget bill

Iran's Guardian Council watchdog has approved the $500 billion state budget, according to the state-run TV.

May 15, 2011 9:59 by

Iran’s Guardian Council watchdog has approved the state budget for the current Iranian year, the state-run television reported on Saturday.

The Iranian new year started on March 21.

The 5,170 billion rial (around $500 billion) budget will now be sent to parliament to be submitted to the government for implementation.

Iranian media have reported the budget is 45 percent bigger than last year’s, based on an oil price of around $81.50 per barrel, $1.50 above the initial proposal by the government.

“The budget was approved by the Council without changes,” said Ali Kadkhodai, spokesman of the Council.

Iran is undergoing what the government has called major economic surgery, in the form of cuts to the multi-billion dollar subsidies which for years have held down the price of essential goods like fuel and food.

But lawmakers have criticised the budget for using too much of the country’s oil revenues for ordinary spending rather than putting it aside for redevelopment that would make it eventually less dependent on the oil industry and more able to deal with international sanctions.

Relations between Ahmadinejad and parliament have become increasingly strained in the past weeks over various reasons, including the late submission of the budget to parliament, leaving little time for parliamentary scrutiny.

Iran, the world’s fifth biggest oil exporter, faces economic hardship because of international sanctions imposed on the country over its disputed nuclear programme.

The United States and its allies say Iran is trying to build bombs under cover of its nuclear programme. Iran denies this, saying it needs nuclear technology to generate electricity for domestic use.

A sustained windfall from high oil prices would better enable the government to offset the impact of sanctions and soften the blow to consumers of any surge in inflation, which is around 14 percent. (Writing by Ramin Mostafavi, editing by Patrick Graham)

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