Possible Consequences of Targeted Subsidies Plan

The Targeted subsidies plan, after a year of debate and careful scrutiny was submitted to the parliament and after its final approval by both the Guardian Council and the Parliament, on December 2008 it became a law and based on the law the Government was bound to implement it. The targeted subsidies plan is part of the seven-fold plan specified in the Economic Development Plan which is referred to as the great revolution in the country's economy. In fact, problems of the previous subsidies payment system concerning payment of subsidies to all and decreased subsidies effectiveness which gave rise to undue consumption increase, decreased competitiveness of domestic goods in international markets etc, caused some solutions to be proposed for correction of subsidies payment system. And the Targeted Subsidies Plan was in this direction. By allocating the distribution of subsidies to accountable Government offices and removing the cap on prices of goods, the planned economic development plan, including the targeted subsidies plan, aim to improve social justice, more transparency regarding economic decisions, reducing mismanagement,price fundamental reform, reducing dependency on oil and increased developmental and productive activities. Therefore, in order to achieve such important economic development, it is imperative that the structural and organizational elements of this project are well in place for a robust and successful performance. This essay will consider the outcomes and possible consequences involved in implementation of the plan. A few economics experts from Tehran University regarding the possible consequences of such undertaking and its economical, social, cultural and political consequences have been consulted. While there is eneral consensus among the experts that such implementation is a necessity for economical success and stability, each expert has placed the focus on certain aspects of this project and the probable positive and negative consequences, all of which will be examined throughout this essay. Some experts were agree or conditional opposes and they know the method of implementing the plan so effective. The result of research conducted through interviews have shown that if the right precondition and infrastructure in implementing this project are met, access the accurate information by the government, informed decision making and dissemination of information across the population and mutual trust between government and people not only such implementation will bring about many positive economical benefits.