State Budget 2020: MVR 1.6B of grants for councils

Addu Hankede bridge.

The state budget for the year 2020 has plans to provide local councils with grants of MVR 1.6 billion.

The budget proposes changing the rules under which councils are provided funding to “Block Grants”. President’s Office Policy Secretary Aiminath Shauna stated in PSM’s “Raajje Miadhu” program that the policy change was made to decentralize councils financially.

“We have decided to provide councils with five percent of the state income, 40 percent of the land rent in the council’s constituency and 100 percent of all other payments,” said Shauna.

How the block grants will be divided:

  • Island Councils – 7 percent
  • Atoll Councils – 51 percent
  • City Councils – 51 percent

The money will be deposited centrally and divided amongst different councils under a fiscal formula, according to Shauna. The aid provided will also take into account the population, size of land area, distance to the capital island of the atoll, distance to Male’ city and how the council is run.

Shauna commended the fact that the new policy could see some islands granted a budget of more than 400 percent. The change would see an increase of 148.6 percent to island councils, 155.1 percent for atoll councils, 433.4 percent for city councils when compared with the budget of 2019.