Government Proposes MVR 5.1 Billion Supplementary Budget

The Ministry of Finance on Thursday submitted a MVR 5.1 billion supplementary budget for parliamentary consideration.

The submission looks to compensate for areas the previous administration neglected to account for when the 2024 national budget was initially approved, the Ministry said, explaining the reason for requisitioning the additional MVR 5.1 billion.

Out of the issues raised, which were not properly accounted for, included allocations for reforms to cut costs from July this year — funding to implement the reforms was missing, the Ministry said.

The Ministry also accused the Ibrahim Mohamed Solih administration of evading its responsibility, noting that the technical work, which now falls on the current administration, had not been properly accounted for.

In addition, the administration was forced to budget smaller amounts for PSIP projects while having to implement previously stalled large-scale projects that had already been contracted last year, with advances paid out, the Ministry said.

Similarly, the budget needs to be supplemented to pay for last year’s bills and newly launched mega projects, as project progress has been faster than expected, the Ministry noted, explaining that out of the MVR 5.1 billion, MVR 2 billion will be spent on PSIP.

Additional reasons cited by the Ministry for the proposed supplementary budget include:

• The approved budget being out of synch with President Mohamed Muizzu’s vision
• Expenses incurred on medical consumables exceeding estimates
• Projected rise in spending on indirect subsidies
• Loans to additional students under the Student Loan Scheme

The Solih administration passed the budget for 2024 knowing that MVR 60 billion was required, Finance Minister Moosa Zameer told Parliament, explaining that the supplement was kept lower with cost control measures in place.

The Parliament-approved National Budget for the year 2024 was valued at MVR 49.8 billion.

Zameer, speaking in Parliament, said that, unlike the previous administration, the current administration will seek parliamentary approval, as per Finance Act requirements, for expenditure expected to be incurred in the coming months. The Solih administration had not followed proper legislative procedure when it came to approving its supplementary budgets, something that the legislative assembly at the time had repeatedly highlighted, he said.

According to figures shared by the Finance Ministry, 74 percent of the MVR 49.8 billion approved for this year had been spent as of last month.

In addition to spending, the supplementary budget also includes changes to revenue estimates. An additional MVR 640 million is expected in terms of state revenue, bringing total revenue to MVR 34.1 billion.

With the proposed budget supplement, the total budget for 2024 is now projected to be closer to MVR 55 billion.