The Finance Ministry has claimed that spending is lower compared to last year, without implementing any cost-cutting measures and failing to raise funds, while not carrying out any development projects as budgeted for the year.
According to the ministry, expenditure has been reduced by 15 percent compared to the same period last year. The biggest drop was in capital expenditure, with about 57 percent less.
The main reason for the lower expenditure is because capital expenditure has been delayed. Capital expenditure so far in the year stood at MVR 3.5 billion, compared to more than MVR 8 billion during the same period last year.
Although the capital budget is not being used, the government claims that development projects are ongoing. But many islanders confirm that no new projects were launched while ongoing projects have been suspended.
The government has also changed the way projects are awarded. Currently, the government is awarding most of the projects to state-owned enterprises. These are projects that are not budgeted for, and the companies bear the financial burden of running the projects.
Although some recurrent expenditures were reduced along with capital expenditures, expenditure on salaries and allowances increased by half a billion over the previous year.
But no salary increases have been announced this year as previously planned. It is also unclear whether the pay harmonisation work is going on as budgeted.
The government has run out of the amount budgeted for debt repayment this year. As of last week, MVR 4.3 billion was spent on debt repayment, while the budget for this year was MVR 3.8 billion. The finance ministry said this was due to an increase in interest expense on previous loans.
Revenue stood at MVR 27.3 billion while expenditure stood at MVR 26.2 billion. The budget had a surplus of MVR 741.2 million at the end of last week.
