Finance Ministry releases circular calling reduce expenditure

The Ministry of Finance and Treasury on Sunday sent a circular signed by Minister Ibrahim Ameer to the government offices, asking to reduce spending.

As per the circular, various global issues like the conflicts between Russia and Ukraine have caused the prices of fuel and other goods to increase, and as a result, increased expenditure of the government. It noted that the impact of these will be felt by the Maldives as well, and the window to take action to manage income and spending before that is reducing.

Hence, it asked the government offices to halt some things such as the creation of new posts and giving promotions.

“The current global scene poses many challenges. Prices of goods are increasing, and so is expenditure. If expenses are unmanaged, and the deficit increases, the burden of that would need to be carried. Dealing with such a burden at this time would not be the best cause of action. Cutting down the government’s spending and economizing need to be prioritized for now.”

The circular listed things that needed to be done to reduce spending.

Some of them are:

- Only necessary services to run office to be provided for now

- Not to start new scholarships

- Not to conduct any kind of training apart from short-term ones from received from abroad

- Maintenance work only to prevent halting of a necessary function in an ongoing project

- Apart from capital expenses under PSIP, only necessary expenses are allowed. For any expense beyond MVR 5,000, seek Finance Ministry’s approval

- No promotions are to be given without the Ministry’s approval

- Only to work overtime when necessary

All the government offices are mandated to follow this circular from Monday, June 20 onwards.

Moreover, councils using block grants as well as their finances need to refer to circular in managing finances, stated the Finance Ministry.