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Last Updated: Monday, 7 March, 2005, 19:00 GMT
Iranian budgetary dispute simmers
Iranian president Mohammad Khatami
President Khatami's budget has met with opposition
Debate over Iran's budget has turned acrimonious with the government accusing hardline lawmakers of shaping it to their own political agenda.

The reformist administration said measures such as high import tariffs and larger funding for the police and the judiciary were counter-productive.

Discussions over Iran's 1.5 trillion rials ($175bn) budget began last week and have been beset by factionalism.

The government wants to raise tax revenues and reduce dependence on oil.

'Us and them'

However conservative politicians - which dominate the country's parliament or Majlis - have increased funding for militia groups and for state television and radio.

They have also boosted resources for the Guardian Council, the conservative body which scrutinises all laws.

Government spokesman Abdollah Ramazanzadeh said the proposals threatened to stoke inflation in Iran, which is already over 15%.

"Projecting unrealistic revenues and obliging the government to follow them in the budget will result in a sharp jump in liquidity and, in turn, inflation," he said.

The imposition of high import tariffs - which were set at 130% for imports of foreign cars - were counter-productive, he added.

"This is the first time in the country's budgeting system that the groups involved are factions in 'us' and 'them' categories which is unacceptable," he said.

Conservative groups said funding set aside for law and order measures made up only a small fraction of the total budget.

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