Budget of MVR 16.9b for 2013 presented to Parliament

The state budget for 2013 was presented to the Parliament by Minister of Finance Abdullah Jihad this morning.

Jihad said that the value of the total estimated budget for 2013 is MVR16.9 billion, while income is MVR12.9 billion, which would result in a deficit of about MVR4 billion.

He informed that the budget was compiled to ensure that recurrent expenses can be covered by income.

MVR16.9 billion is an increase of MVR1.8 billion when compared with the state budget for 2012.

Jihad announced that MVR2.5 billion had been assigned for the education sector, MVR1.7 billion for strengthening the judicial sector, MVR926 million for housing, and MVR5.5 billion directly for Atolls.

Jihad said that the current account deficit is likely to increase by 15 percent to 28 percent of GDP, and noted that priority will be given to increase exports in order to improve the Balance of Payments position.

He informed that a Pay Review Board had been formed to address the problem of the high public model expenditure, and that 22 government-owned companies will be dissolved, bringing the number of government-owned companies down to 44.

Jihad proposed to increase T-GST to 15 percent, and to impose fuel and communication services GST in order to increase state income.

The Minister warned that the deficit could increase beyond acceptable international standards, which would result in serious difficulties in obtaining loans.

Following the presentation of the budget, the Speaker announced that the parliamentary debate on the budget will take place from 4 to 6 December, and that the first meeting of the Budget Review Committee will be held at 3:00pm today.