Contingency budget to be utilized make up the shortage in budget for block grants

With funds allocated for block grants to local councils in the proposed state budget for next year falling short of the legal requirements, Finance Minister Moosa Zameer has filed a request seeking to make up the difference from the contingency budget.

MVR 1.4 billion has been allocated in next year’s budget for block grants.

It falls short of the legally required amount that must be disbursed to local councils under the Decentralization Act which has prompted critique and concern from the opposition.

However, President Dr. Mohamed Muizzu has assured that local councils will be disbursed the legally required amount as block grants.

Finance Minister Zameer sent a letter to the Parliament on Wednesday which informed the government’s decision to increase the MVR 1.4 billion included as block grants in the state budget proposed for next year to meet with legally required amount under the Decentralization Act.

In this trajectory, he requested to withdraw MVR 99.6 million required to meet the legally required amount for block grants from the contingency budget. With this change, the sum disbursed to local councils as block grants will see an increase.

As per the Minister, the government decided to make up the difference from the contingency budget in order to not make any revisions to the total amount in the budget proposed for next year. Henceforth, the Minister requested approval for these changes without total amount.

Parliament Speaker Abdul Raheem Abdulla has forwarded the Minister’s letter to the Budget Committee.

The Decentralization Act mandates local councils to be disbursed five percent of the total amount in the budget as block grants. The opposition raised concerns after the sum allocated for block grants in the proposed budget for next year was lower than the legally required amount.

Notably, opposition MDP has called on the government to resubmit a revised budget over the issue.