The government has spent a supplement of MVR 367 million on subsidies after the budgeted total for 2023 was fully exhausted.
According to the statistics released by the Ministry of Finance, the state has surpassed the budgeted amount by MVR 280 million for the Aasandha health insurance scheme. Furthermore, an additional MVR 88 million has been expended beyond the budgeted total on other subsidies.
So far, the government has allocated MVR 5.6 billion for subsidies and council grants. Despite a budgeted total of MVR 1.8 billion for council grants in 2023, expenditures have already reached MVR 1.1 billion.
While the state expenditure on subsidies has exceeded the budgeted total this year, the government spent more than budgeted total on subsidies in 2022 as well mainly due to additional expenditure on fuel.
In 2022, the government allocated MVR 2.3 billion for oil expenditure, constituting a portion of the total MVR 8.4 billion designated for subsidies.
Despite a surge in state revenues, the subsequent rise in expenditure presents a challenge for the government in maintaining fiscal balance. The primary factor contributing to the budget deficits in recent times is the substantial expense on subsidies, which has risen year on year.
International institutions like the World Bank and the International Monetary Fund (IMF) have counseled the Maldives government to enhance its management of subsidy-related expenditures.
Despite the government's efforts to curb subsidy outlays through revisions over the last two years, a robust mechanism to effectively manage subsidy expenditure is yet to be implemented.
Sign In