Weekly statistics released by the Ministry of Finance show that as of December 5, expenditure on Aasandha and subsidies has significantly decreased compared to last year.
The government has taken steps to reduce unnecessary expenses on Aasandha and subsidies, which are the largest burdens on public expenditure, according to financial figures.
Weekly statistics released by the Ministry of Finance show that as of December 5, expenditure on Aasandha and subsidies has significantly decreased compared to last year.
This year, expenditure on Aasandha is MVR 1.88 billion, approximately MVR 101 million less than in 2023. Similarly, subsidy expenditure has decreased from MVR 3.68 billion last year to MVR 3.44 billion this year, marking a reduction of about MVR 233 million.
The government has reforms in both systems to reduce costs. One measure involves regulating the prices of 250 commonly used medicines in the Maldives and collaborating with STO to import these drugs in bulk. These initiatives are expected to save around MVR 220 million annually under the Aasandha scheme.
Further reforms include introducing progressive contributions from higher-income earners. Starting next year, individuals earning more than MVR 60,000 per month, or those subject to income tax, will be required to contribute a specific amount towards Aasandha to help reduce the state's cost of providing free medical treatment. A co-payment system will also be introduced for wealthier individuals seeking certain services, where they will cover a portion of outpatient and non-essential medication costs, subject to a maximum annual out of pocket limit. After reaching this limit, services will remain fully covered.
The Finance Ministry estimates that these measures will save MVR 600 million.
In addition to Aasandha reforms, the subsidy system will undergo changes next year, including a shift to a targeted subsidy system.
According to the detailed report for next year's budget, the subsidy will provide MVR 2,450 per month to the poorest 20 percent of households. Additionally, a large portion of the population will continue to receive subsidies for fuel, electricity, staple foods, and sewerage services.
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