The Strategies for Introducing Reform to Consumption Pattern in Iran's Metropolises (Through the Plan for Targeted Subsidies)

Subsidies are offered for maintaining balance in the distribution of income, reducingthe effects of the pressure of market on the consumers, and for reducing the productioncosts as well as supporting the producers. The purpose for paying subsidies is efficientallocation of the resources, fixing the prices, maintain balance between supply anddemand, and redistribution of the earned income. What paying subsidies have inconsequence is the encouragement and growth of the sections of the economy whichhave received subsidies in contrast to the ones having been deprived of them. Therefore,paying subsidies is a part of supporting policies of the government to modify anddirect economic trends, as there are a lot of factors causing lack of balance betweendifferent sections of production, distribution, consumption, and business. In additionto the economic aspects of subsidies, due to the utilization of a large group of peopleof consumer subsidies and the tangibility of them for the people, they have politicaland social aspects and the purpose for granting subsidies is modifying the consumers’behavior. Regarding the fact that paying subsidies is one of the supporting instrumentsprovided to neutralize the lack of balance in the economy of families, it is possible thatit can bring about lack of balance. To increase the purchasing power of the consumersand/or to increase the producing power of the producers and controlling the negativeeffects on the consumers, the government or the agent organization pays subsidies tothe corresponding sections. As a result, subsides provide support for paying a part ofthe total cost of a product or service which are granted by the government. In otherwords, they are direct or indirect governmental payments, or economic privilegeswhich are given to private institutions, households, and other governmental sectionsso that the intended purposes of the government are achieved. Moreover, subsidies arefinancial supports or other equivalent supports which are given to a certain serviceeven though such a service is not economical, profit-wise. However, for public welfareit is necessary that the government offers free financial supports to its affiliated bodies,which is also referred to as granting subsidies.