Parliament is currently studying the budget and has allocated MVR 1.9 billion for six subsidies next year. If reform measures are not taken, the total cost of subsidies will increase to MVR 4 billion.
The budget will increase to MVR 3 billion if the measures included in the budget are not taken to reduce government expenditure, Ministry of Finance said.
According to the detailed budget report released by the ministry, subsidy expenditure will increase by MVR 2.1 billion next year if the principle of giving subsidies to those most in need is not implemented.
Parliament is currently studying the budget and has allocated MVR 1.9 billion for six subsidies next year. If reform measures are not taken, the total cost of subsidies will increase to MVR 4 billion.
The government sent a budget of MVR 57 billion to Parliament for next year.
The finance ministry has added four subsidies in the budget targeted for the disadvantaged. From April next year, subsidies for fuel, staples, electricity, and sewerage will be given based on household income. The budget has allocated MVR 900 million for this purpose.
In addition to subsidies, Aasandha expenditure will increase by MVR 700 million if expenditure is not reduced. With that, the expenditure on Aasandha is likely to increase to MVR 2.5 billion. The government has decided to take contributions from the wealthy and create packages for services provided by private hospitals.
If reform measures are not taken, other welfare services provided through NSPA could add another MVR 240 million, bringing the total expenditure on it to MVR 900 million.
The ministry said that if the measures are not taken, the budget deficit will increase and the burden on budget financing will grow.
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