Ministry of Finance has said it will prioritize reduction of fiscal deficit and the overall state debt in the 2024 budget.
The proposed budget focuses on fulfilling pledges of the new government as top priority along with significant austerity measures.
The 2024 state budget was proposed with targeting subsidies with the introduction of a direct transfer system. Austerity measures include expenditure for Aasandha; state-initiated health insurance, and provisions for state-owned enterprises (SOEs).
Budget report states the measures taken by the government for next year will reduce subsidies by MVR 1.2 billion, which is a 13 percent decrease of the total subsidy allocation of 2023. State's expense for Aasandha is projected to reduce by MVR 500 million.
The total allocation for subsidies in 2024 is MVR 2.2 billion, and MVR 1.9 billion for Aasandha.
The ministry said that failure to reduce state expenditure will inflate the budget deficit to MVR 15.6 billion in annual terms for next year, with a supplementary requirement of MVR 1.8 billion.
- Total Budget: MVR 49.5 billion
- State Expenditure: MVR 47.3 billion
- State Revenues: MVR 33.5 billion
- Balance: MVR 13.7 billion in deficit
- Increase Gross Domestic Product (GDP) to MVR 114.6 billion
- Maintain economic growth at 5.5 percent
- Tourist Arrivals: 2.01 million in annual terms
- National Reserve: USD 606 million
- Inflation Rate: 3.9 percent
From the total state budget, 70 percent will be utilized on recurrent expenditure, which is MVR 34.8 billion, and MVR 6 billion for capital expenditure. The ministry allocated MVR 8.6 billion for Public Sector Investment Program (PSIP) initiatives.
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