Decision made to reduce budget to MVR14.5 billion

The Parliament Budget Committee has decided today to reduce the MVR16.9 billion budget presented by the government to the parliament to MVR14.5 billion. It also decided to approve a maximum limit of MVR2 billion for new loans taken by the government.

The Budget Committee, which is made up of members of the Public Accounts Committee and Economic Affairs Committee, made the decision to reduce the budget with the support of members of Maldivian Democratic Party (MDP) and Progressive Party of Maldives (PPM), while Dhivehi Rayyithunge Party (DRP) said that the budget should not be reduced.

Nolhivaram MP Mohamed Nasheed (Colonel) told Sun Online that the Committee made these decisions because the majority of the Committee believes that this is the remedy for the economic challenges presently faced by the country. He said that the Committee’s earlier decision that new loans taken by the government should not carry an interest rate higher than seven percent, also remains unchanged.

“In line also with the governor’s advice, the committee members were able to agree today that the budget has to be reduced in order to reduce the state debt and get the economy back on the right track. That’s how this decision was made,” he said.

Governor of Maldives Monetary Authority (MMA) Fazeel Najeeb said while speaking at the committee today that the budget of MVR16.9 billion is too large, and that it needs to be reduced to MVR14.5 billion. He said that the International Monetary Fund (IMF) had also advised to do the same.

The committee decided that no expenditures on civil service and independent institutions employees should be reduced except for overtime allowance. It also decided that the expenditures on Public Sector Investment Programs for 2013 should not be reduced.

The committee also decided to notify Finance Ministry to present a consultancy paper to the committee in relation to the changes to be made to the budget following these revisions.

It also passed to send a proposal to Finance Ministry on how to cut down the budget by MVR1,067 million.

These decisions by the Budget Committee will have to be passed through voting at the parliament.