Amendments to the 2014 state budget could not be submitted as scheduled today, Finance Minister Abdulla Jihad has stated, delaying the submission process for the fourth time.
The budget – submitted by the outgoing administration of President Dr Mohamed Waheed – has been undergoing amendments in accordance with the aims of the new government of President Abdulla Yameen.
Jihad – finance minister under both presidents – told local media today that although the final draft cannot be submitted to parliament today, the majority of the work had been completed.
He stated that the main reason for the delay was that the government had so far not provided enough details about some projects they wished to include in the budget.
Jihad asserted that a final draft of the budget with all the required amendments will be ready for submission by Sunday, December 8.
The Finance Ministry has stated that issues such as decreasing overtime allowances and non-profit allowances, and revising conditions for the provision of subsidies will be reviewed when submitting the newly amended budget.
President Yameen has expressed concern over the economic vulnerability of the Maldives and pledged to reduce state expenditure by MVR1 billion (US$64.9million).
“State debt is sky high. The state budget’s expenses are extremely high. Hence, we have to prioritise reducing state expenditure. I will start work very soon to reduce budget expenses,” Yameen said during his inauguration speech.
The Maldives Monetary Authorities’ (MMA) most recent quarterly review noted that Government finances had “further deteriorated in the first six months of 2013” due to a sizeable shortfall in expected revenue coupled with a marked increase in recurrent expenditure.
While the delay has brought the work of Parliament’s budget committee to a temporary halt, Speaker of Parliament Abdulla Shahid has instructed the committee to submit its final review report on the budget to the Parliament floor by December 15.
Elsewhere, the Public Accounts Committee has today passed a proposal for the government to obtain a US$29million loan from the Bank of Ceylon as annual budget support and submitted it to the parliament.
The loan request was submitted by the Waheed administration in September.
The Public Accounts Committee report outlines that the loan is to be paid back by the government in a period of six years. The loan has a grace period of one year, after which a monthly payment of US$490,000 has to be paid to the Bank of Ceylon.
The committee has passed the proposal for the loan despite it having an 8% interest rate – the parliament had previously decided that any loans taken by the government must have an interest rate of no higher than 7%.
Earlier this week Indian media reported that the country would soon be releasing a further installment of the US$100million standby credit facility.