The People’s Majlis Budget Committee has increased the proposed budget for 2014 to MVR17.96 billion (US$1.16 billion).
The committee added MVR432 million (US$ 28 million) to the MVR17.5 billion budget (US$ 1.1 billion) proposed by the Ministry of Finance and Treasury.
The addition includes MVR260.5 million (US$ 16.9 million) for Public Sector Investment Programmes (PSIP) and a MVR171.1 million (US$11 million) increase to the budget of independent institutions.
The budget deficit now stands at MVR1.3 billion (US$84.3 million). Recurrent expenditure accounts for over 70 percent of the budget.
Budget debate concluded today with MPs proposing an additional 35 revisions. These revisions and the state budget will be put to the vote next week.
Yesterday’s budget debate was suspended after opposition Maldivian Democratic Party (MDP) MPs complained of lack of development funds for their constituencies. At the time the total budget stood at MVR17,811,234,380 (US$1.155 billion).
The Budget Committee met last night and added an additional MVR233.4 million (US$ 15.1 million) to the PSIP sector.
Budget Committee proceedings
On 17 December 2013, the Budget Committee added MVR786.6 million (US$51 million) to the proposed budget, resulting in a record MVR18.3 billion (US$1.19 billion) budget.
The increase was for development projects and increasing the budget of independent institutions.
On the same day, Minister of Finance and Treasury Abdulla Jihad said such a budget would be unmanageable and appealed the committee not to increase the proposed budget by more than MVR200 million (US$13 million).
The Budget Committee met again and reduced the budget to MVR17.8 billion. However, with MDP MPs’ objections on Wednesday, the budget was modified to MVR17.96 billion.
The Budget Committee met with Ministry of Finance and Treasury, the Ministry of Education, Aviation Security Command, the Maldives Associatoon for Construction Industries, the Maldives Association for Tourism Industries (MATI), the state’s independent institutions and local councils during its deliberations.
According to the budget report, several independent institutions said the Ministry of Finance had reduced their respective budgets and the allocated amounts were not enough to cover wages. The independent institutions also said the budget reductions would affect their ability to carry out their constitutional mandates.
The central bank Maldives Monetary Authority (MMA) proposed a raft of recommendations including reducing state expenditure by cutting down the civil service and holding parliamentary, presidential, and local council elections at the same time.
The MMA also called on the Majlis to reduce recurrent expenditure to MVR10.2 billion (US$661 million) and reduce state debt.
MP Abdulla Jabir proposed 14 recommendations, which were also included in the budget report.
These include developing a hospitality college to train Maldivian students in order to reduce the number of expatriates working in the tourism sector.
Jabir also proposed increasing state revenue through leasing state land for 99 years, leasing lagoons for residential and commercial purposes, establish free trade zones and introduce off-shore banking, develop aqua-culture and mariculture, develop yacht marinas and ports, establish a international finance center and opening up reclaimed land in Hulhumalé and other islands for development.
In addition, Jumhooree Party (MP) MP Gasim Ibrahim proposed increasing funds for the judiciary while MDP MP Hamid Abdul Ghafoor proposed reducing state expenditure by MVR2 billion.
MDP MP Ilyas Labeeb proposed that the government be prohibited from taking out loans with interest rates greater than seven percent, while MP Mohamed Aslam proposed that directors appointed to state owned enterprises be mandated to complete a director’s course.