ABSTRACT
Iran's current 'targeted subsidies', in effect monthly cash payments to almost all Iranian families, have led to a deficit of IR100 trillion over the last three years. Iran's 2010 Subsidies Targeting Act aimed at ending the 30-year-old across-the-board and costly practice of selling government-supplied energy, water, power, and other items to the public at below cost-often at as little as 20-25" of their international prices. A cursory look at Iran's current consumption pattern shows that while fuel use was temporarily reduced after the initial price increases, no further reduction has occurred, and gasoline consumption is now back to its previous level. According to Iran's High Council of Elders, there are now 6mn old people in Iran of which 30" live below the poverty line and are assisted by various charities. The Islamic government's across-the-board subsidies, in either price discount or cash payment forms, fail to meet the universal criteria of efficiency and equity.
