MP Saleem: Budget for next year needs to be revised to MVR 25 billion

Parliament’s minority leader, Eydhafushi MP Ahmed Saleem (Redwave Saleem) has called on the government to withdraw the proposed state budget for 2022, and resubmit it after revising it to MVR 25 billion.

The government proposed a budget of MVR 36.9 billion to the parliament for next year.

The Parliament began its debate on the budget on Monday morning.

Speaking during the debate, MP Saleem noted that government debt stood at an average of MVR 4 billion during the previous administration – whereas it has increased to approximately MVR 13 billion to MVR 14 billion during this administration. He stressed that this was very risky.

MP Saleem said that the debt amount forecasted in the budget is not right – adding that it will stand at around MVR 14 billion or MVR 15 billion.

Noting that the government debt had increased subsequent to the COVID-19 pandemic – MP Saleem said that the priority as we reach normalcy should be to slash down the debt amount.

“Moving forward with the level of debts from the pandemic period is not a burden that the government can afford to carry, nor a burden that people can carry. It should be kept in mind that these budgets result in debts of approximately MVR 13 billion or MVR 14 billion every year,” he had said.

MP Saleem said that if the proposed budget is moved forward with – it is likely that prices of commodities will hike to unreachable rates in the upcoming Ramadan.

“When things reach to this level, our currency will lose its value. Dollar rates will increase up to MVR 19 to MVR 20 – which will also increase prices of commodities,” he had said.

He stressed that it is important to keep in mind that the more debt keeps increasing – the more expensive the price of dollars become.

MP Saleeem also said a budget of MVR 75,000 has been allotted for daily expenses at Mulee’aage whilst people are struggling to make ends meet – adding that no such amount of money should be spent on one person whilst the people starve.

In the proposed budget for next year – the projected total expenditure inclusive of loan repayments and contributions to international financial institutions is MVR 36.9 billion -  whilst the projected total revenue inclusive of revenue and grants is MVR 24.2 billion. This means a deficit of MVR 9.7 billion – which is 11.1 percent of the GDP.

To finance next year’s budget – a total of MVR 13.4 billion needs to be secured. That is the MVR 9.7 billion in deficit, MVR 28 billion needed to repay loans and MVR 805 million needed for other purposes.