Finance Minister Moosa Zameer has asked the Parliament to cover the shortfall in the legally mandated block grants to councils through the contingency budget without making changes to the total amount of the proposed state budget for 2025.
A letter signed by Zameer was read out in the 47th sitting of the Parliament today. The letter has been referred to the Public Accounts Committee. He asked the Parliament to arrange MVR 699 million from the contingency budget for councils.
This year, the government proposed a budget of MVR 56.6 billion. The total revenue of the state is expected to be MVR 39.7 billion. Under the Decentralization Act, block grants are allocated to councils after deducting the amount for a specific purpose, land rent income and trust fund income.
According to the figures calculated by Adhadhu, the revenue after these deductions is MVR 27.9 billion. Five percent of that is MVR 1.3 billion. Forty percent of the rent of resorts and agricultural land should be added to this amount. That is MVR 747.7 million.
This means that at least MVR 2.1 billion should be allocated to the councils. However, MVR 1.4 billion was allocated as block grants in the proposed budget.
The contingency budget is MVR 1.1 billion, of which about MVR 700 million will be allocated to councils, leaving MVR 400 million.
Councils and political parties expressed concern as the proposed budget did not include the amount required by law. President Dr. Mohamed Muizzu later assured that the required amount will be allocated before the budget is approved.
