The government has decided that a monthly subsidy of MVR 2,450 will be granted to the 20 percent of the population found to be most financially disadvantaged.
The government has decided that a monthly subsidy of MVR 2,450 will be granted to the 20 percent of the population found to be most financially disadvantaged.
The detailed budget report published by the Ministry of Finance stated that the new subsidy policies will be designed the benefit those most in need. MVR 900 million has been included in next year's budget to be distributed as targeted subsidies.
As blanket subsidies are currently given, the most advantage is received by wealthier households. Figures show that 43 percent of subsidies are now allocated to the wealthiest 40 percent of the population.
The poorest 20 percent of the population currently receives only 17 percent of government subsidies.
The new subsidy policies will come into effect from April, 2025.
Ministry of Finance said that the poorest 20 percent of the population is expected to face an increase of MVR 1,770 in monthly expenses when the subsidy reforms are set in motion. The ministry said that according to current plans, an amount in excess of this figure will be provided to these households as targeted subsidies.
The subsidies that will be provided to each household will be decided after reviewing the income of the combined household.
Finance Ministry said that these new policies would present a significant assistance to those most in need.
While the subsidy issuance is being developed as a direct transfer system, this will initially be introduced in four subsidies; staples, fuel, electricity and sewerage.
Households must apply for these subsidies. Finance Ministry said that issuance of these subsidies will be arranged in a convenient manner in collaboration with councils.
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