Government overspends by MVR 1.1 billion on subsidies and assistance as spending reaches MVR 9.8 billion

The government has spent more than MVR 9.8 billion on subsidies and other forms of assistance this year as of the 18th of this month, according to the Finance Ministry.

The approved budget for subsidies and assistance for the year is MVR 8.6 billion. This means expenditure has already exceeded the allocation by MVR 1.1 billion, an overrun of 13 percent.

During the same period last year, spending in this category stood at MVR 9.7 billion.

The largest share of this year’s spending went toward subsidies. A total of MVR 3.4 billion has been spent so far, despite the approved budget being just MVR 1.8 billion.

Aasandha was the next biggest expenditure, with MVR 2 billion spent as of the 18th. The scheme’s annual budget is MVR 1.9 billion.

Aid to local councils has reached MVR 2.2 billion, slightly above the approved MVR 2.1 billion.

Of the MVR 2.8 billion allocated for other forms of assistance, MVR 1.7 billion has been spent so far.

Medical welfare spending has reached MVR 321.6 million out of an annual allocation of MVR 327.3 million.

The Maldives remains one of the world’s most subsidy‑heavy countries, with the state covering costs ranging from electricity, water, fuel and staple foods to healthcare, education, disability support, single‑parent allowances and elderly benefits. Although some rules exist, subsidies and allowances are not targeted, meaning both the richest and the poorest receive the same benefits. This broad approach continues to place a heavy burden on state finances.

International financial institutions, including the World Bank and the IMF, have repeatedly urged the Maldives to shift to targeted subsidies aimed only at those who need them. However, successive governments have avoided implementing such reforms.