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'Proposed budget will fulfill several pledges' - Finance Minister

Nov 12, 2019

Male (Maldives) Nov 12: Finance Minister Ibrahim Ameer has called on the parliament to approve the proposed budget for 2020, stating that the budget would fulfill several pledges made by the government.
Finance Ministry proposed a budget of MVR 37.5 billion for the upcoming year. Minister Ameer presented an overview of the budget before it was debated during Tuesday's parliamentary sitting.
The minister said the budget was based on achieving the goals of the fiscal strategy prepared by the government in July.
The minister added that the proposed budget would bring revolutionary changes to the health and education sector.
MVR 4.1 billion has been allocated for the heath sector in the proposed budget for 2020.
While MVR 51 million will be spent on upgrading Kulhudhuffushi Regional Hospital to a tertiary hospital, MVR 90 million will be utilized to develop a tertiary hospital in G Dh Thinadhoo. An additional 184 million has been allocated to develop health centers across the nation and expanding its services.
Ameer said the budget allocated for the education sector is the largest to date, with MVR 4.42 billion allocated for the free degree education program, student loan schemes and school breakfast program.
The proposed budget sets aside MVR 600 million for the construction of 20,000 housing units across Maldives to tackle housing issues.
Five new strategies have been included in next year's budget to increase state revenue. The state is predicted to receive MVR 2.5 billion through the newly introduced strategies, said the minister.
This includes the introduction of quota fees for expatriates, and increasing the work permit fees. While this is estimated to generate a revenue of MR 714 million, the introduction of income tax is estimated to generate a further MVR 770.6 million. A revenue of MVR 290 million is expected as acquisition cost for new resorts that will be leased during the year.
Changes to customs fees and import duty is likely to increase revenue by an additional MVR 558 million, and airport service charges and airport development fees are expected to increase revenue by MVR 319 million.
"This budget has been designed such that it can fulfill most pledges in the government's manifesto. Therefore, I request the parliament to approve the budget as proposed by the government", appealed Ameer.
Parliament's General Purpose committee has allotted 21 hours for budget debate. Therefore, every member will receive 15 minutes to speak on the proposed budget, and an additional 7 minutes after the budget review committee's report is received.
Speaker of the Parliament and former president of Maldives Mohamed Nasheed has announced that Tuesday's parliamentary sitting will go on until 5 pm to debate on the budget. If a member is absent at the time designated for him to speak on the budget, the member will be summoned to the parliament through the Parliament's Sergeant of Arms, said Nasheed.
The budget for 2020 is focused mainly on recurrent expenditures which accounts for MVR 22.2 billion from the budget. With an estimated revenue of MVR 29.92 billion, the budget leaves the archipelago with a deficit of MVR 5.7 billion. The budget proposes MVR 10.2 billion for PSIP projects and MVR 5 billion for capital expenditure.
The proposed budget for next year will likely invite more criticism after the new government since taking office nearly a year ago has thus far failed to fully utilize this year's budget despite getting a supplementary budget in August.
An initial budget of MVR 30.2 billion was approved for the current year by the parliament. However, the government in August got the parliament to sign off on an additional MVR1.7 billion as a budget supplement.
The government has come under heavy criticism from the opposition for failing to launch major infrastructure projects this year with the budget reflecting the unused funds for PSIP.
2020 Budget overview:
Total proposed budget: MVR 37.5 billion
Recurrent expenditure: MVR 22.2 billion
PSIP: MVR 10.2 billion
Capital expenditure: MVR 5.1 billion
Revenue: MVR 29.9 billion
Deficit: MVR 5.7 billion