Apparently the 1405 Budget Is Different

TEHRAN (Iran News) Each ministry or government body prepared its proposed budget based on this directive and within the framework of the Seventh Development Plan, and then submitted it to the Plan and Budget Organization.

The Plan and Budget Organization consolidated all the proposals from the agencies and usually submits the National Budget Bill to the Islamic Consultative Assembly (Parliament) in Azar or Dey (December–January) for review.

Parliament then reviews the bill in specialized committees and in the public chamber. After approval, it is sent to the Guardian Council for confirmation. The finalized budget law is then issued by the President for implementation.

For the year 1405, two significant structural changes have been made in both the drafting and the review of the budget:

A shift toward operational and performance-based budgeting for government agencies.

A reform of the budget review process in Parliament through the separation of “tables” from “provisions.”

In previous years, many budget provisions accumulated without ever being implemented. These needed to be removed, amended, or turned into permanent laws.

Based on the new regulations, the budgets of agencies will no longer be determined through traditional bargaining, but instead according to their activity levels, service quality, cost efficiency, and effectiveness.

Agencies are required to define annual objectives, performance indicators, and work standards for each program.

Agencies that provide more effective output, higher quality, and lower costs will receive priority in budget allocation.

This year, there is a noticeable emphasis on: financial balance and discipline, targeted improvement of livelihoods through increased tax revenues, correcting energy and water imbalances, and continued attention to strengthening the country’s defense capabilities—more so than in previous years.

Last year, although supportive and defense policies continued, there were criticisms that the directive lacked specific operational provisions to ensure financial discipline.

The transition from traditional budgeting to performance-based budgeting, along with the reform of Parliament’s review process to ensure greater transparency for the agencies, may help fundamentally eliminate the chronic budget deficit and enable better control over inflation.

Although invisible hands continue imposing 50% inflation on the public to maintain class inequality—something they cannot do if the Central Bank refuses to allow it—this year Parliament is pursuing a new approach for overseeing the method and timing of implementation. If carried out, it could help pave the way for economic reform.