Budget will not last till the end of next year: Jihad

Finance Minister Abdulla Jihad has said that the parliament approved MVR 15.3 billion budget might not last until the end of the year and that a supplementary budget might have to be introduced sometime next year.

The parliament budget committee had reduced the budget from MVR 16.9 billion to MVR 15.3 billion.

Talking about the budget, Finance Minister Abdulla Jihad told Sun Online that the services that have to be provided by the government have been doubled and that it will become difficult for the government to manage the budget, and more money will be needed at some point during the coming year.

“Because the budget is reduced, it will become difficult to manage expenses at a certain point. We think that a supplementary budget has to be introduced. We will try to do it that way. We will reduce the budget the way the parliament has asked. We’ll carry it out that way,” said Jihad. He did not however say when the supplementary budget will be introduced or the size of the supplementary budget.

Jihad said that the government will face certain difficulties due to some amendments brought to budget by the parliament and that the State has been forced to reduce spending to the amount which is absolutely necessary. He also said that they have commenced talks with the offices to reduce their budgets.

“We don’t have any other choice. Due to the amendments brought in areas which were planned for further revenue generation, we have to reduce the expenses. Things will settle down a bit then,” said the Minister.

The parliament had supported only a few of the areas the government had proposed for revenue expansion. These include imposing GST on telecommunication services and reemploying the import duty. The parliament had decided to remove the Bed Tax and increase the TGST to 12 percent. They had also agreed to revise import duty from only a few of the types of goods.

The committee first tried to reduce the budget to MVR 14.5 billion. The government then challenged the reduction and the committee had decided to reduce it to MVR 15.3 million. The budget report states that some of the areas in which the budget has been reduced include overtime allowance, materials used in offices, some goods used to provide services.

The Finance Minister had said earlier that education and health sectors will suffer if the budget was reduced and that the parliament has to approve the initially proposed budget if those sectors are to see the needed development. MMA and the Auditor General had both opposed these propositions.