Supplementary budget of MVR 5.1 billion proposed to parliament

Government has today submitted a supplementary budget of MVR 5.1 billion to the parliament.

The budget was proposed by Minister of Finance Moosa Zameer in today's parliament sitting. This is the first budget compiled under Zameer's leadership after he assumed the position on September 30.

With the supplementary budget, the total budget deficit will reach MVR 18 billion.

The largest part of the supplementary budget is to be spent of PSIP projects. Out of the proposed 5 billion, 2 billion is allocated for PSIP projects.

Some important components of the Supplementary Budget

- PSIP : MVR 2 billion

- Subsidy (fuel, staples, electricity, water and sewerage): MVR 1 billion

- Student loan: MVR 458 million

- SOEs: MVR 441 million

- NSPA: MVR 263 million

- Medical consumables: MVR 200 million

- Salaries: MVR 24 million

Finance Ministry said that such a significant allocation is necessary for PSIP Projects due to the need to spend over budget for some projects. This is because the current year's budget did not have realistic allocations for the projects, the ministry said.

The reason behind having to extend budget to SOEs is because for some of the new projects, and to release capital for the commencement of operations for the newly established development bank, MVR 150 million had to be spent.

The allocation for student loans is being increased because the government has decided to issue more loans than was initially decided under the scheme.

Subsidy costs are increasing because the subsidy reforms were not implemented as previously planned. With the previously set MVR 2.8 billion for subsidies, the additional allocation would result in a total of MVR 3.8 billion being allocated for subsidies.

When this year's budget was proposed, the government had said that with the proposed reform measures, MVR 2.5 billion could be saved. However, as these were not implemented, with the supplementary budget, the total budget could reach up to MVR 55 billion. At the start of the year, the government had approved a budget of MVR 49.5 billion.

Finance Ministry said that as of now, MVR 39.2 billion of the budget has been spent. If an additional MVR 640 million is received as revenues this year, it is expected that total revenue will reach MVR 34 billion.