Finance Ministry has made the decision to revise the projected state budget for 2020, and resubmit it to the Parliament for approval.
Finance Ministry confirms it will submit the revised budget to the Parliament once it reopens after recess, but has yet to disclose the specifics of the revisions which will be made.
The Parliament approved a projected state budget of MVR 37 billion for 2020. While the state was originally projected to earn MVR 29.9 billion as income this year, Finance Ministry has revised the original projections in light of the economic toll of the coronavirus pandemic, and now projects the state will earn MVR 15.2 billion, in the best case scenario.
Finance Ministry has also announced the state will need an additional MVR 12 billion to cover expenditure for the remainder of the year.
The Cabinet discussed plans to revise the budget in June. The President’s Office said at the time that the President advised the Cabinet to make the necessary revisions in a manner which is most beneficial to the people.
The drastic drop in tourist arrivals due to the coronavirus pandemic has resulted in cashflow constraints, while imported inflation has risen. Meanwhile, the slowdown in economic activity has resulted in a drop in tax revenue.
While the Finance Ministry is braced to submit the revised 2020 state budget once Parliament reopens, it has also announced plans to submit the projected state budget for 2021 before the end of October.