Challenges in budget financing this year: Minister Shafeeq

Minister of Finance Dr Mohamed Shafeeq has revealed today that there are significant challenges being faced in seeking financing to deal with this year's budget deficit.

The Minister made these comments while speaking in today's meeting of the Public Accounts Committee of the Parliament.

The Minister said that the budgets passed in the last two years have major deficits, and this year it amounts to MVR 14 billion. He stated that cost cutting measures need to be put in place within the year at this time when spending from companies have risen markedly.

Shafeeq assured that the government will be taking the necessary steps to decrease spending, including decreasing subsidies being provided to companies.

He highlighted that the companies are currently not run as efficiently as they should be, noting that actions need to be taken to reduce spending on the part of these companies as well.

The Minister spoke of the Road Development Corporation (RDC) as an example of the benefits of cost cutting. He revealed that even to date, MVR 17 million had been saved through cost cutting measures taken in regard to this company.

"We have now made a timeline, and are proceeding with implementation. Bringing about these reforms is no longer simply an option. We need cooperation from Parliament Members in this work," he said.

While this year's total budget is at MVR 49.8 billion, seventy percent of this is being spent on recurrent costs. So far, MVR 18 billion has been spent from the budget, with MVR 15 billion received as revenue.

"We are working to change the situation from how it is now. We cannot delay the current reform agenda," he said.

Shafeeq stated that the Ministry would highly prioritize implementing these reforms to stabilize the economic situation. As per the Budget, steps will be taken from July onwards to decrease costs. This includes changing to targeted subsidies and reforming State Owned Enterprises.