Gov has not run out of 2024 budget; spending at 76%

The Finance Ministry says that though it has submitted a supplementary budget of MVR 5.1 billion, it has not completely run out of the MVR 49.8 billion budget passed for this year.

The statement comes amid accusations by the opposition that the government has completely run out of the 2024 budget.

According to the ministry, the total spending as of September 30 stands at MVR 37.4 billion, which is 76 percent of the budget.

Finance Minister Moosa Zameer presented a supplementary budget of MVR 5,119,508,129 to the Parliament on Thursday morning. This will increase the 2024 budget to MVR 55 billion.

Out of the total supplementary budget, MVR 1.5 billion are for recurrent expenditure. This includes:

• Salaries: MVR 24.4 million
• Medical supplies: MVR 200 million
• Subsidies: MVR 1 billion
• Medical aid: MVR 262.6 million

MVR 3.6 billion is for capital expenditure. This includes:

• Land reclamation, construction and infrastructure development: MVR 2 billion
• Capital contributions: MVR 441 million
• Contingency: MVR 650 million
• Student loans: MVR 458.4 million

“The budgeted figures for PSIP weren’t realistic. This supplementary budget also includes an additional allocation of MVR 2 billion to manage the cost of projects because such small figures were allocated in the original budget,” said Zameer, while presenting the budget.

According to the supplementary budget, the Finance Ministry estimates the state will receive an additional MVR 640 million in revenue and grants. This includes MVR 61 million in tax revenue, MVR 379 million in non-tax revenue, and MVR 199 million in grants.

The MVR 5.1 billion supplementary budget proposed by the government is significantly lower than the previously estimated MVR 10 billion.

According to the Finance Ministry, it proposed the supplementary budget because spending in certain segments had risen above previously estimated figures. It attributed this to unrealistically small budget allocations for projects, and the lack of preparations made in the last years to implement fiscal consolidation measures planned for July this year, which resulted in delays in implementing the measures and the spending failing to get reduced to projected levels.

Zameer had previously also cited “major irregularities” in recording last year’s finances, which he said will force the government to find space for an unaccounted MVR 2 billion in this year’s budget.