Parliament passes MVR 36.99 billion budget for 2022

The Parliament passed the projected state budget for 2022 on Wednesday, in accordance with the changes made by the Budget Committee following its review. 

The budget proposed by the Finance Ministry, with debt repayments and payments to international financial institutions, had totaled MVR 36.9 billion. 

The committee added MVR 73.8 million to the budget, increasing total expenditure to MVR 34.10 billion and the total budget to MVR 36.99 billion. 

The MVR 73.8 million added by the committee include MVR 57.4 million for PSIP projects in 82 islands, an additional MVR 73,782 for political parties from Finance Ministry’s special budget, MVR 7 million for the Parliament’s new policy initiatives, and additional funding for seven independent institutions. 

The budget report presented by the committee was called to vote at the Parliament on Wednesday afternoon. It passed with a majority vote of 64 parliamentarians. Eight parliamentarians voted against it. 

43 parliamentarians took part in the budget debate which stretched to over 20 hours. Government parliamentarians spoke in favor of the budget, while opposition parliamentarians voiced concern over the high recurrent expenditure and debt. 

BUDGET 2022 

The budget projects MVR 24.3 billion as revenue and grants, therefore, the 2022 budget is a MVR 9.7 billion deficit budget. 

The government will need an additional MVR 13.4 billion to finance the budget in order to cover the MVR 9.7 billion deficit, the MVR 2.8 billion needed to repay loans, and MVR 805 million needed for additional spending. 

The government plans to secure the additional funds through: 

• USD 200 million: Sale of bonds and sukuk to foreign investors 

• USD 187 million: Loan disbursements for projects 

• USD 50 million: Sale of green or blue bonds 

• USD 50 million: Budget support 

• MVR 771 million: Privatization of state-owned enterprises 

EXPENDITURE 

Total expenditure, excluding loan repayments, is MVR 34 billion. 

• Recurrent expenditure: MVR 24.8 billion (67 percent) 

• PSIP: MVR 6.2 billion (17 percent) 

• Other capital expenditure: MVR 5.8 billion (16 percent) 

26 percent of the expenditure – which amounts to MVR 9.7 billion – is on salaries and allowances, 12 percent is on administrative expenses, and 13 percent is on aid and subsidies. 

INCOME 

The government projects to receive MVR 24.2 billion as revenue and grants. This includes MVR 15.3 billion in tax revenue and MVR 6 billion in non-tax revenue, and MVR 2.91 billion in grants and other income.