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Caution urged on Iran subsidy plan

The Iranian government’s plans to scrap state subsidies should not lead to “political disputes” in the country, says the head of Iran’s Supreme Audit Court.

“The implementation of the subsidy plan should not lead to political disputes and factional conflicts,” Abdolreza Rahmani Fazli said in an interview with ISNA on Monday.

He further urged the government to inform the people of the “repercussions” of the plan such as an “increase in prices.”

The government of President Mahmoud Ahmadinejad plans to start in September the phasing out of up to $20 billion in state subsidies for staples such as food and fuel.

Some analysts have criticized the plan, saying it could trigger a hike in prices and stoke up inflation.

The government has not indicated the new prices or how the savings generated from cutting the subsidies will be distributed among the population.

Rahmani Fazli also criticized the government’s implementation of the privatization policy, under Article 44 of Iran’s Constitution.

He said most state companies have been handed over to “semi-official” companies and added, “The private sector has been involved in at most 15 percent of the transactions and handovers.”

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