What do we know of the latest of supplementary budget push by government?

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Source: Mihaaru

The Maldives government in August 2019 has pushed for a supplementary budget, as a means of placing adjustment to the existing state budget in order to compensate for forecast insufficiency that is projected to arise.

The supplementary budget will be placed into Maldives parliament in adherence to Article number 96 of the Maldives Constitution and subsection (b) of Provision number 32 of Act number 3/2006, otherwise known as “Law on Public Finance.”

The bill that will enter Maldives parliament will include detailed excerpts of the country’s economic status for the current fiscal year along with details on state revenue and expenditure will be detailed.

The subsection (b) of Provision number 32 of Law on Public Finance cites “the annual State budget, when being submitted as per subsection (a) of this section, must set out, under separate headings, the estimated expenditure of the State and the estimated income of the State for the financial year to which the budget relates and the expenditure of the State and income of the State for the previous financial year.”

The subsection (a) of the same Provision dictates “for each financial year, the Minister must prepare and submit to the People’s Majilis the annual State budget at least one month before the beginning of the financial year to which the budget relates.”

The current administration asserts the main aim for placing a supplementary budget is mainly to avoid the original state budget to fall into insufficiency. According to a statement from Maldives Ministry of Finance, a total of 50% of the total State budget has been spent by end of July 2019.

In addition to this, several state pledges and projects lack funds apportioned to them in the initial budget which in turn resulted in the budget falling into restraints – to compensate for this the current administration has called for a supplementary budget.

According to Ministry of Finance’s statement, the country’s economy is estimated to grow by 5.4% with the country’s major economic sector Tourism, continuing its strong growth as forecast. In addition to this, the Public Sector Investment Program (PSIP) which slowed down during the first 3 quarters of 2019 is expected to pick up and considerable spending will be made on this during the final quarter.

The approved total revenue with the inclusion of grants was valued at MVR23,339.8 million while the cumulative revenue and grants for the period of January till end of July 2019 reached MVR14,160.0 million.

The total tax revenues, approved for 2019 is at MVR16,506.5 million while the cumulative total for the seven months that has concluded came to MVR10,850.6 million. Non-tax revenues were approved at MVR5,648.7 million while cumulative total for the months that has concluded reached MVR2,738.9 million.

Maldives government has approved a total of MVR1,353.0 million as grants for the full fiscal year of 2019 while the cumulative total until end of July 2019 reached MVR570.5 million.

The total approved budget for 2019 was announced at MVR30,241.7 million while the cumulative expenditure for January until July 2019 reached MVR15,059.3 million. Loan repayment approved for the current year reaches MVR2,887.9 million while the cumulative total of loans repaid reach MVR677.3 million.

Total expenditure, which has been approved for the year is valued at MVR27,342.3 million while the cumulative total of expenditure for the period January until end of July 2019 reaches MVR14,375.2 million.

The approved total recurrent expenditure for 2019 is valued at MVR18,529.3 million while the cumulative total of recurrent expenditure until end of July reached MVR10,921.3 million. Capital expenditure approved for the year is at MVR8,813.1 million of which MVR4,137.9 million has been spent by end of July.

Maldives government’s Public Sector Investment Program (PSIP) will have a total of MVR7,076.7 million injected by end of 2019 while the cumulative total of spending on PSIP by end of July reached MVR2,074.3 million.

The overall balance for the period of January till end of July 2019 was observed at a deficit of MVR215.2 million.

While the approved revenue and grants for Maldives state was initially valued at MVR23,339.8 million, due to significant improvements in primary economic sectors such as tourism and construction may result in an improvement of the final figure.

As for the supplementary budget, a total of MVR716.8 million will be added into the approved revenue and grants, the amount coming as a grant, increasing the approved revenue and grants to MVR24,056.6 million.

While the total state budget was initially valued at MVR30,251.7 million, a supplementary of MVR1,703.2 million will increase it to MVR31,954.9 million.

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