200% Increase in Military Spending in the Islamic Republic's 'Borrowed Budget'

Fatemeh Mohajerani, spokesperson for Masoud Pezeshkian's government, announced a 200% increase in the Islamic Republic's military budget for the upcoming year. Mohajerani claimed in a press conference on Tuesday, November 8, that this increase is intended to 'strengthen defensive capabilities.' The statements from the spokesperson of the fourteenth government came after the approval of the general outlines of the 1404 budget bill by the Islamic Consultative Assembly. Masoud Pezeshkian, the president of the fourteenth government of the Islamic Republic of Iran, defended the general outlines of the 1404 budget bill in a public session of the Assembly on the same day. He announced that the government would use the issuance of securities to pay off its debts and would cover the budget deficit from foreign currency sources 'with the leader's permission.' While, according to reports from state media, Pezeshkian did not explicitly mention the government's borrowing from the 'National Development Fund,' Nasrollah Pejmanfar, head of the Assembly's Article 90 Commission, referred to the 1404 budget as 'borrowed.' He stated that 'non-essential expenditures have not been reduced in the 1404 budget bill' and added, 'This budget is a borrowed budget, as a large amount of securities is set to be printed and withdrawals from the National Development Fund are also planned.' Pezeshkian promised a 20% increase in the salaries of low-income groups in next year's budget, stating that 'the average salary increase will be 28%' and for 'those with higher expenses and larger families, their salary increase could be up to 40%.' However, another criticism from Nasrollah Pejmanfar regarding this bill was the inconsistency between the salary increase and inflation rates. As an opposing representative, he noted that 'the salary increase is only 20% while inflation has risen by 33%' and added that 'with these figures, the living conditions of government employees will certainly worsen.' In another part of Pezeshkian's defense of the budget bill, he overlooked taxes on profitable sources like taxes on 'businesses and listed companies,' which were supposed to be one of the government's income sources. Pezeshkian mentioned the lack of an increase in taxes on businesses, stating that 'if they earn income and invest it, that income will not be taxed.' According to reports, another important point in the general outlines of Pezeshkian's budget bill is the repayment of 200 trillion tomans of government debt to banks. Pezeshkian also highlighted borrowing 230 'hemt' (trillion tomans) from the National Development Fund to pay off debts to wheat farmers, considering the allocation of budget lines for the salaries of retirees and wheat farmers as 'strengths' of this bill. The government's debt to wheat farmers and retirees has led to numerous livelihood problems for these two groups and has been one of the main sources of protests in recent months. Nevertheless, Pezeshkian did not mention the budget line for overdue salaries of retirees and stated that the amount allocated to wheat farmers is 140 'hemt,' which is almost half of the budget needed for purchasing from wheat farmers. Another criticism raised by Nasrollah Pejmanfar was that 'the reduction of allocated foreign currency for essential goods to 12 billion dollars requires management so that it does not pressure the people.' He also emphasized that the budget bill does not align with the seventh development plan, its structure has not been revised, and the projected economic growth is limited to 4%, which contradicts the goals of the legal program. Despite these fundamental criticisms from opponents, the bill was approved with 146 votes in favor, 96 against, and 4 abstentions from 249 representatives present in the Assembly's public session. The Assembly will begin reviewing and approving the details of the budget in the Joint Commission and then in a public session in the coming days.