Government concedes to a reduced budget of MVR 15.3 billion

The government has shown their consent to the Parliament Budget Committee’s decision to reduce the budget to MVR 15.3 billion.

The committee had earlier decided to cut down the proposed budget of MVR 16.9 billion to MVR 14.5 billion. Following a cabinet meeting government had advised the committee not to reduce the budget to MVR 14.5 billion.

Last Thursday night, the committee had reviewed the budget again and decided to cross off some of the sections budgeted for recurrent expenses to reduce it to MVR 15.3 billion.

Finance Minister Abdulla Jihad told Sun Online on Saturday that the government agreed to the MVR 15.3 billion budget because the parliament members were inclined towards reducing the budget and that the government wanted to give into that.

“Reducing the budget is not a simple task. It is something very difficult for the government. But after reflecting on the inclinations of the members, we decided to give in,” said Jihad.

He said that this decision could pose problems to implementing certain policies next year and that government was willing to give in, even if it meant a reduction of one billion. He added that he was relieved that the PSIP programs have not been scrapped off from the budget and said that PSIP projects were crucial for the development of the country.

“It was a good decision by the committee to continue to PSIP programs the way they are. It will bring development to the country. Reducing the budget is not the solution to economic problems,” said Jihad.

Heeding the advice of the political party leaders in the parliament, the budget report currently being drafted includes and added MVR 394 million for the PSIP programs. This amount has been crossed off from codes allocated for the government to acquire capital assets, transportation, and other services.

The Auditor General and the Governor of Central Bank have both recommended that the budget be reduced to MVR 14.5 billion. Contesting the recommendations, the government has said that education sector and the health sector will suffer greatly if the budget was reduced and that and furthermore, it will affect the economy as a whole.