Nasheed opposes budget increase of MVR 366 million

Speaker of the Parliament expressed his opposition to the additional MVR 366 million injected into the state budget for 2020 by the Budget Committee of the Parliament after assessing the proposed budget.

The MVR 37.5 billion budget for 2020 was increased to MVR 37.8 billion by the members of the Budget Committee unanimously and forwarded to the Parliament, where the debates by MPs on the amended budget are currently underway.

The additional MVR 366 million was largely designated for PSIP projects. Nasheed started today’s Parliamentary session by stating that the increased budget would also increase the deficit from a rate of 5.8 percent to 6.2 percent. Nasheed stated that for this reason, the budget should not be increased higher than the amount proposed by the Finance Ministry.

Nasheed also pointed out the failure to bring a change to the estimated income of the government, despite the increase in the expenditure.

“In my view, increasing the budget deficit from 5.8 percent to 6.2 is a huge amount,” said Nasheed.

The fiscal responsibility laws of the country state that the budget deficit for every year should be below six percent.

The Budget Committee also made a recommendation to the Finance Ministry over the funds set for councils. The Committee recommended for councils to inform the Finance Ministry over how the funds were going to be utilized.

The state budget for 2020 designates MVR 1.6 billion for councils as block grants which will see the budgets of some of these councils increased by three times.

Nasheed noted that if the details of the expenditure of the budget by councils were to be formulated, it would be very difficult to utilize the budget for the development of the islands by the councils.

Nasheed also said that it was an extremely important task for the Parliament’s legislative and research department to maintain the records of the state and council’s expenditure of the budget, before stating that he expected all the works regarding the budget to be concluded within the next two days.