Parliament minority leader calls for budget to be withdrawn, slashed to MVR 25 billion

Parliament’s minority leader, Eydhafushi MP Ahmed Saleem (Redwave Saleem) has called on the government to withdraw the proposed state budget for 2021, and resubmit it after revising it to MVR 25 billion.

The Parliament began its debate on the budget on Monday morning.

Speaking during the debate, Saleem said that the budget must be as beneficial to the people as possible, and that resort workers and farmers are in dire straits.

He called on the government to slash the budget by approximately half, stating that the government should be focusing on protecting the people from the dire economic circumstances they face instead of conducting development projects.

“The action today calls for isn’t to build bridges. The 'thing' of today isn’t to build this or that place. We should head towards mega projects, but only after things stabilize. Given the circumstances we face today, we must adjust to these circumstances,” said Saleem.

“What we are telling you is to withdraw this budget. Withdraw it and resubmit it to the Parliament after reducing it to MVR 25 billion.”

Saleem said that no one of sound mind would vote for the budget, and that the passage of such a massive budget will “destroy” the people.

He said that the government needs to swallow its pride and do what is necessary to stabilize the economy.

Saleem said that it is unlikely the government will receive the projected revenue for 2021 as actual revenues and grants fall short of projections each year.

Saleem said that it is likely the actual fiscal deficit in 2021 will rise to MVR 20 billion – higher than the projection.

The government presented the proposed state budget of MVR 34.79 billion for 2021 to the Parliament last week.

The projected expenditure totals MVR 33.29 billion while the projected revenue totals MVR 17.79 billion, resulting in an overall budget deficit of MVR 15.50 billion - which is 23 percent of the GDP.

Sources of revenue to proposed to cover budget deficit:

• USD 300 million (MVR 4.63 billion): Through sale of bonds and sukuk to international market
• USD 100 million (MVR 1.54 billion): Through sale of green or blue bonds
• USD 150 million (MVR 2.31 billion): Through loans from foreign countries and international institutions
• MVR 3.7 billion: Through sale of bonds to the domestic market
• MVR 462 million: Through privatization of state-owned companies