Over MVR 27 mln disbursed as Income Support Allowance: Finance Ministry

Ministry of Finance, on Monday, disclosed that, as of July 27, over MVR 27,2 million was disbursed under the Income Support.

According to the ministry's updates, a total of 6,638 individuals who were financially affected by the ongoing COVID-19 pandemic have received the allowance.

The Income Support Allowance scheme was spearheaded by the Maldivian government to provide a temporary monthly allowance of up to MVR 5,000, to people who lost their employment or income as a result of the pandemic.

Implemented by the Ministry of Economic Development in collaboration with the National Social Protection Authority (NSPA) and Maldives Pension Administration Office (MPAO), the allowance was paid out for three months, across April to June, to eligible individuals.

The World Bank also approved USD 12.8 million last month, to support the government's Income Support scheme. The assistance comprises a USD 6.4 million grant and a USD 6.4 million credit from the International Development Association (IDA), the World Bank’s concessional credit window for developing countries.

As a country heavily reliant on the hospitality field for income, the restrictions on local and global travel and tourism as a result of the COVID-19 pandemic have severe repercussions on the Maldivian economy, with many losing their jobs and local companies struggling to stay afloat.

In mid-April, the World Bank estimated that Maldives will be the worst-hit country in the South Asian region, in the ensuing economic regression caused by the pandemic.

In a bid to counteract the financial impact of COVID-19, the Maldives government introduced an economic relief fund with MVR 2.5 billion intended to prevent the closing down of local businesses and the loss of jobs.

Meanwhile, the Finance Ministry projected earlier that the state deficit would reach MVR 13 billion this year compared to the MVR 5.9 billion originally stated in the 2020 State Budget, as a result of economic repercussions caused by the COVID-19 pandemic. The ministry also projected that the total state debt sans guarantee would increase to MVR 70 billion, which accounts for 86.6 percent of Gross Domestic Product (GDP). An overall 115 percent drop is projected in the GDP, along with 81.3 percent for nominal GDP.