Despite low revenue, budget MVR 1.4 bn in surplus with expense cuts

Despite a drop in state revenue so far this year, this year's budget is still at MVR 1.4 billion in surplus due to cost cuts, financial records have shown.

According to the Finance Ministry's weekly financial statements, revenue and grants stood at MVR 4.8 billion as of February 13 last year. However, the figure declined to MVR 4.4 billion during the same period this year.

Tax and non-tax revenue so far this year has also declined.

Tax revenue fell to MVR 3.9 billion from MVR 4.1 billion last year. Non-tax income also fell to MVR 541.3 million this year from MVR 718.7 million last year.

However, the impact of the decline in revenue was greatly mitigated by saving on total government expenditure, especially with the total expenditure having had declined to MVR 3 billion this year from MVR 4.1 billion in the same period last year.

About MVR one billion was also saved from total expenditure by reducing recurrent expenditure. While recurrent expenditure stood at MVR 3.27 billion this time last year, the figure was reduced to MVR 2.87 billion this year.

Although salaries and pensions increased by more than MVR 100 million over the previous year, the total recurrent expenditure was reduced by reducing administrative and operating expenses. According to the data, administrative and operating expenses were reduced to MVR 1.73 billion this year from MVR 2.18 billion last year.

However, the biggest contributor to this reduction in expenditure was the decline in capital expenditure, which declined to MVR 169.8 million from MVR 855.8 million last year.

Infrastructure development projects (PSIP) also fell to MVR 324.8 million from MVR 819.4 million last year.

As of February 13, the government's revenue exceeded its total expenditure by MVR 1.4 billion compared to the same period last year.