Several government offices fail to meet deadline to reduce budget

Ministry of Finance has said that several government offices have failed to meet the deadline of 20 June to reduce budgets by 15 percent.

“All offices cooperate with us on this matter. We are in discussion with those which have not sent us the reduced budgets. They are also cooperative, but haven’t been able to reduce budgets due to difficulties,” Minister of Finance Abdullah Jihad said in an interview with Sun Online.

Noting that given the current economic situation faced by the country, the state has no choice but to reduce budget by 15, Jihad said that’s several independent institutions have also sent the reduced budgets to Finance Ministry as requested.

“Independent institutions which have not sent the reduced budgets have also agreed to do it, they are also cooperating with us,” he said.

Permanent Secretary of Ministry of Finance Ismail Shafeeg said in an earlier interview with Sun Online that offices are facing difficulties in reducing budgets because it is mid-year, and because several offices had already reduced their budgets before the budget was passed by Parliament.

The government has decided to reduce all government expenditure except salaries, and to reduce the state budget by 15 percent.

A circular sent by Minister of Finance Abdullah Jihad requests all government offices and councils to reduce their budgets by 15 percent and submit the new budget to the Ministry of Finance before 15 June; and all independent institutions to do so before 20 June.

The cabinet made the decision on 22 May to reduce the budgets of every government institution by 15 percent, and by doing so, hopes to save about Rf2 billion.

Ministry of Finance has estimated that the budget of Rf14b proposed for this year will become Rf18b, which is a deficit of about Rf3.4b. IMF has expressed concern over rising state expenditure in the Maldives. It is estimated that the deficit will increase to 27 percent.