Budget needs amendment by Parliament: Jihad

Minister of Finance Abdulla Jihad has said that this year’s budget requires immediate amendment, and has proposed that the budget be submitted to Parliament for amendment once again.

In reply to questions posed by some Members of Parliament (MPs) at the meeting held between the International Monetary Fund (IMF) Mission currently in Maldives and MPs, Minister Jihad said that there is not enough money in the government reserves to finance several of the huge projects mentioned in the budget.

“The suggestions made by IMF will be proposed at the cabinet meeting tomorrow. The decision to submit the budget to the Parliament will be made after that. As a member of the cabinet, I would say that the budget needs amendment,” Jihad said.

Stating that the country is in an economic slump, he said that while 67 companies require public spending, several projects by these companies cannot be commenced, while others cannot be completed, due to lack of finance. He questioned how these projects can be financed.

“Let’s look at one example. The company Works Corporation has contracted projects worth Rf 500 million. Contract finance is to be utilised for these projects. But because they can’t get the money, we have to finance them,” Jihad said.

He said that the budget assigned for Island Councils is not enough, and the councils are already requesting for more money. However Finance Ministry can only cover the recurrent costs of these councils for the next two months.

“I tell them that we, Finance Ministry, do not have the money. All we can do is change money from one budget code to another,” Jihad said.

He also said that about Rf 1 billion worth of bills remain unpaid, and that salaries are paid by delaying some of these payments.

One concern raised by MPs at today’s meeting was the rise in government expenditure, and government’s failure to address this issue.

The budget total is Rf 17.1 billion and state revenue is estimated to be Rf 11.48 billion; however both IMF and the government believe that the budget will be short of about Rf 2 billion as the estimated revenue will not be received.