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Minister of Finance Abdullah Jihad has said that no solution has been found to managing the cash flow for October, November and December of 2012.

Providing information to Parliament’s Finance Committee on the government’s current financial situation, Jihad said that while the estimated income for this year until now was MVR11 billion, only MVR7 billion had been received.

And while estimated costs for this period was MVR14 billion, MVR9 billion had already been spent.

He said that the budget-support loans necessary to make up for the deficit had not yet been received.

“MVR2 billion should be received as budget support. I don’t believe that we will receive this amount. So far we have only received MVR300 million, which is the loan from BML. Such loans have not been realised. We will have a budget shortfall, we won’t be able to finance it,” he said.

He further informed that the government is required to pay bills which amount to a total of about MVR300 million. He said that due to the financial constraints, the government is only able to settle day-to-day bills.

Jihad said that a loan of $17 million will be obtained from ADB as budget support in order to pay salaries for this month. This amount, however, will not suffice; and unless the $25 million promised by India is secured, it may be difficult to pay salaries and other bills.

He noted that the expenditure on health corporations and government companies is relatively high.

“At this rate, the country’s cash flow management will become extremely difficult. I don’t see how we can manage the cash flow for October, November and December. We are trying to figure out a solution,” he said.

Jihad said that the severe deficit resulted from having to use this year’s budget to settle last year’s bills.

He said that the only permanent solution to the budget problems would be to change the structure and revise the entire budget.

He said that efforts are under way to achieve this.

He informed that several big projects have been halted to ensure daily operations of the government.

Members of the Finance Committee expressed readiness to work towards finding solutions to the Minister’s concerns.

Kaashidhoo MP Abdullah Jabir said that the President consulted leaders of political parties when determining government expenditures, and stressed the importance of the Finance Minister’s leadership when making decisions related to government expenses.

He urged Jihad to present a paper to the President and the Finance Committee, highlighting the proposed revisions to the budget.

Mulaku MP Abdullah Yameen said that instead of obtaining loans to make up for deficits, it is important to address the underlying problem. He also advised that the entire budget be revised.

Fuvahmulah Dhekunu MP Abdullah Maseeh advised to put together a plan for cutting costs, and assured that such a plan would be welcomed by the Parliament.