State Budget 2022: MVR 1.5 billion as block grants for local councils

Addu City Council headquarters. (Sun Photo/Fayaz Moosa)

The proposed state budget for the year 2022 has MVR 1.5 billion allotted for local councils as block grants.

As per the amendment made to the Decentralization Act in 2019 – local councils must be allotted at least five percent of the revenue forecasted for each year and must also be issued 40 percent of the revenue generated from leasing land, islands and lagoons in the council’s constituency is not under its jurisdiction.

Whist presenting the budget statement at the Parliament today – Finance Minister Ibrahim Ameer said that the proposed state budget for next year will include MVR 1.5 million as block grants for local councils as state revenue is expected to increase during next year.

This is a 19.8 percent increase from what was issued as block grants for local councils this year.

Block grants will be divided amongst local councils as follows:

  • Island Councils – 72 percent
  • City Councils – 19 percent
  • Atoll Councils – 9 percent

Block grants were issued to local councils under the Decentralization Act for the first time in 2020.

Minister Ameer said that block grants are a historical initiative that helps increase the self-sufficiency of local councils and promote their financial independence.