Nazim: Seeing the economy declining without any cost reduction measures

Ahmed Nazim, the deputy speaker of Parliament and a prominent politician from the ruling People’s National Congress (PNC), stated on Monday that despite the planned fiscal reforms by the current administration, the failure to implement cost reduction measures has led to a decline in the economy.

Parliament’s Public Accounts Committee, on Monday, reviewed a complaint submitted by a former staff at the Auditor General’s Office after not receiving allowances eligible for following retirement.

Speaking at the meeting, Nazim, who represents Dhiggaru constituency in the Parliament, proposed to seek the details of how the government is implementing fiscal reforms. In this regard, he expressed his belief that the Committee should inquire the progress of the work as a Reform Commission has been formed within the Finance Ministry specifically for fiscal reforms, at a high salary.

“This is as, while we are yet to see an improvement for the economic issues, we are also yet to see a reduction in expenditure,” he said.

As an example, he pointed out the expenses of the government’s health system, Aasandha. He detailed that Aasandha expenses rose to MVR 3 billion last year, accounting for approximately 10 percent of the revenue earned by the state during last year. Nazim attributed the drop in state revenue to a decrease in imports of cigarettes due to duty hikes.

According to Nazim, it would be concerning if the revenue drops again in the next quarter, as this would leave no option but to reduce expenditure.

“Without any reforms, we will be going around in circles, talking about the same thing at the start of each year,“ he said.

“Thus, I feel the need to do this [inquire information on the progress of fiscal reforms] as there is no way to improve without cost reduction measures even if we take extremely comprehensive steps economically or even if we take steps to resolve the USD issue,” he added.

The latest statistics by the Finance Ministry show that the state earned MVR 3.77 billion in revenue as of February 6^th. This accounts for an 18.8 percent decrease compared to the same period last year when the state earned MVR 4.64 billion.

The most significant decrease is from import duty, accounting for a 64 percent decrease compared to the same period last year.

While the current administration has included a large number of fiscal reforms in this year’s state budget, Finance Ministry has projected these measures would save the state MVR 11.5 billion.