Spending on development projects from January to May of 2024 was lower compared to the same period last year, however spending on salaries increased significantly, according to data from the Ministry of Finance.
As per the Ministry’s Weekly Fiscal Report, published 30 May, the state had spent approximately MVR 4.9 billion on Public Sector Investment Program (PSIP) projects within the first five months of 2024. PSIP spending totalled MVR 2.1 billion; approximately MVR 2.8 billion less than the spending over the same period last year — MVR 8.9 billion was budgeted for PSIP projects this year.
As the year approaches its half-way point, only 23 percent of the PSIP has been spent — in 2023, 55 percent of the allocation had been spent over the same period.
While expenditure on projects has decreased significantly, the administration maintains that no projects are being halted.
The biggest slide on development spending saw expenditure on water and sewerage projects go down to MVR 230 million — MVR 735 million had been spent on water and sewerage projects up to the same point last year.
While approximately MVR 1.58 billion was spent on transportation projects last year, over the same period only a mere MVR 321.1 million was spent this year. Expenditure on projects overall declined significantly compared to the first five months in 2023.
Spending on salaries however, increased by 12.6 percent over the same period last year. Even as the administration cut capital expenditure by MVR 2.4 billion, spending on salaries increased by MVR 614 million — the total spend on salaries at end of May2024 stood at MVR 5.4 billion in contrast with the MVR 4.8 billion spent within the same period in 2023.
While the Mohamed Muizzu administration has been criticised for making a significant number of political appointments, it received renewed criticism for those appointments contributing to the higher wage bill.
The state’s revenue, however, increased within the same period in 2024 by MVR 716 million when compared to the first five months in 2023 — revenue collected within the first five months last year was MVR 14.1 billion while 2024 earnings over the same period came in at MVR 14.8 billion.
Tax revenue accounted for the bulk of state income with MVR 7 billion collected as GST; of which MVR 4.9 billion was from tourism.
Non-tax revenue in the first five months of 2024 fell 18 percent to MVR 2.6 billion — earnings over the same period last year amounted to MVR 3.2 billion.