Councils to get MVR 2.5 billion as block grant next year

The Finance Ministry has allocated a budget of MVR 2.5 billion as the block grant for councils next year.

The Decentralization Act stipulates the allocation of 5 percent of the annual projected state revenue towards providing block grants to local councils. Councils were disbursed MVR 2.15 billion in block grants last year, and MVR 2.25 billion the year before.

The block grants must be utilized by councils to invest in community projects, generate revenue, and provide municipal services.

The Finance Ministry, in a circular dated July 23, projects a block grant of MVR 2.5 billion for next year.

Councils have been instructed to submit their projected budget for 2027-2029 to the ministry by September 18.

President Dr. Mohamed Muizzu, as well as members of his party, the People’s National Congress (PNC), have previously criticized how councils utilize their block grant.

Back in August last year, President Muizzu complained that some councils were spending all the funds on overseas trips and other initiatives that do not benefit the local communities they serve.