The Direction of the 2016 Budget Bill by President Hassan Rouhani

Hassan Rouhani, the President of Iran, on Sunday, shortly after the implementation of the nuclear agreement and the lifting of sanctions related to Iran's nuclear program, presented the 2016 budget bill and the sixth development plan to the Parliament. According to parliamentary regulations, the government is required to submit the annual budget bill by December 5 so that representatives can review and approve it before the end of the year. The delay in presenting the budget bill has drawn criticism from some representatives, with 13 of them having requested the government last week to at least provide a 'three-twelfths' budget for the first three months of the year. However, Rouhani stated on Sunday, January 17, during the presentation of the budget bill, that 'as you know, the timing of the bill's presentation coincided with the implementation of the nuclear agreement and the lifting of sanctions, and the government deemed it inappropriate to present the budget bill based on the assumption of lifted sanctions before they were actually lifted due to external reflections and international sensitivities.' Regarding the orientation of the sixth development plan and the 2016 budget, the Iranian President said that based on the general policies of the sixth plan outlined by Ayatollah Khamenei, an economic growth rate of eight percent has been set, and the main goal of this plan is 'to achieve rapid, sustainable, and job-creating growth, but achieving eight percent growth requires attracting at least $30 to $50 billion in foreign investment each year.' Rouhani announced the main economic direction of the government to achieve these goals in the post-sanctions era as 'attracting foreign investment, developing non-oil exports, and efficiently utilizing foreign exchange resources,' but added that given the severe drop in oil prices, which has been unprecedented in decades, 'we cannot base the future of economic growth and employment on optimistic assumptions whose realizability is uncertain.' Rouhani emphasized that for this reason, 'oil should be a complementary source for us to create infrastructure.' The total budget ceiling for the upcoming year was announced by the Iranian President as 952 trillion tomans. He also stated that a five percent economic growth rate has been considered for the next year, and revenues are expected to grow by 16 percent compared to 2015. He added that approximately 68 percent of these revenues will come from tax revenues and 32 percent from other revenues, with the share of oil in the next year's budget reduced to less than 25 percent. Based on the budget bill presented to the Parliament, the price of each barrel of oil is set at $40. Consequently, the share of oil sales in the next year's budget is estimated at 66 trillion tomans, reflecting a 17 percent increase compared to the figure projected in this year's budget. Additionally, the price of each US dollar is projected at 2997 tomans. In continuing his explanation of the budget bill, Rouhani referred to the government's economic policies to achieve its goals for the coming year. He stated that the government intends to 'stimulate demand in the economy through a series of fiscal, monetary, and credit policies, without violating the government's goal of reducing and controlling inflation.' He then outlined the economic policy headings of the sixth plan and the 2016 budget as follows: - Increasing government investments despite the drop in oil prices to about 200 trillion tomans. - Utilizing $50 billion in foreign financing in the 2016 budget to stimulate the economy. - Involving the private sector to enhance efficiency in the implementation and operation of construction projects. - Increasing the average annual growth rate of non-oil exports by 15 percent. - Reducing bank interest rates through short-term monetary easing policies. - Issuing 5 trillion tomans in participation bonds to stimulate construction projects. Balancing budget plans, increasing the research budget by one percent of gross national product, and increasing the budget for social services and Mehr housing infrastructure were also announced as other government policies for this purpose. The Iranian President listed joining the World Trade Organization, adopting stable currency policies and export incentives, reforming the energy market, and addressing the water and environmental crisis as other items in his agenda. In response to the late submission of the budget, Rouhani submitted his budget bill to the Parliament on January 17 instead of December 5. Ali Larijani, the Speaker of the Parliament, reacted to this delay by saying that representatives will try to do their work as much as possible, but since the parliamentary regulations for submitting the budget by December 5 have been violated, the government must present a 'two-twelfths' bill to the Parliament so that 'if the review of this bill does not materialize, we have another bill to ensure that the government's work in various sectors does not face problems in the months of Farvardin and Ordibehesht next year.' Now, representatives have 10 days to submit their proposals regarding the budget items and clauses to specialized committees, and these committees then have 15 days to provide their expert opinions to the consolidation committee, after which the consolidation committee must conduct its reviews within two weeks and send the bill for voting in the Parliament.