Opposition political parties have expressed concern as the amount allocated for councils in the proposed State Budget 2025 has been reduced beyond the proportion mandated by law.
Article 9 of the Decentralization Act says that at least five percent of the total projected state revenue should be allocated to councils.
The government has proposed a budget of MVR 56.6 billion for 2025. The budget estimates revenue at MVR 34 billion. Five percent of the estimated revenue is MVR 1.7 billion. However, only MVR 1.4 billion has been allocated to the councils.
Opposition Maldivian Democratic Party (MDP)'s National Council member and former Chairperson of the Parliament's Decentralization Committee, Ali Niyaz told Adhadhu that the government wants to introduce a system where councils request the ministry for budget. He noted that such a system would be unlawful.
"The minimum amount required by the law should be given. This is an idea that [People's National Congress] PNC MPs have brought into the Parliament. But the law does not allow this," Niyaz said.
In recent years, the amount allocated for councils has increased due to the increasing state budget. MVR 1.3 billion in 2021, MVR 1.6 billion in 2022, MVR 1.8 billion in 2023 and MVR 2.2 billion in 2024 was allocated for councils.
Addu city mayor Ali Nizar criticised the reduction of funding for council and said he was unsure whether the budget of MVR 68,020,040 would cover the salaries of the Addu city council employees.
"When the government does not disclose the financial situation of Maldives and does not take any steps to reduce expenditure, I believe this kind of fiscal policy is discriminatory and deceptive," Nizar said in a post on X.
The opposition-aligned Democrat also condemned the reduction of funding for councils.
"The Democrats are deeply concerned and condemn that the Finance Minister has violated the law by deducting a huge amount of block grants to councils in violation of the Decentralization Act, which requires councils to receive at least five percent of the total revenue of the state budget," the party said in a statement.
The party called on the government and the finance minister to act within the legal framework.
