Promotions and new allowances to be halted to control government expenditure

Finance Ministry has instructed all government institutions to freeze making new recruitments and promotions to their staff.

In a circular sent to government offices signed by Finance Minister Ibrahim Ameer on Sunday, he said the price of fuel and other goods have risen due to the war between Ukraine and Russia. It said it was leading to an increase in state expenses as well.

It stated the surge in fuel price was narrowing the space that was previously available to manage income and expenses. If expenses were not controlled, the circular said, the deficit would increase and the government would have to carry that burden later on.

“… as it is clear this is not the best time to carry this burden, we have to reduce state expenditure and economize,” the circular said.

In order to reduce state expenses, finance ministry has instructed all state institutions to not create any new positions that will be state funded. They also said no new allowances is to be introduced this year. The ministry has also said promotions can be issued only with their permission and that overtime work is not to be carried out unless absolutely mandatory.

Some steps taken to reduce cost

- Only take services that are required to manage the company

- To not start new scholarships and to halt all training except short scholarship courses provided by foreign countries and institutions

- Not carry out any repairs other than those required to ensure that the work is underway or that the service is not interrupted.

- Not to make any capital expenditure except for the capital allocated in in PSIP.

- To obtain finance ministry’s permission if any of the aforementioned exceptions go above MVR 5,000.

The circular stated all government offices will have to start acting on the circular from Monday onwards. Island councils will also have to follow the circular as per spending block grants and spending income generated on their own as well.