Government announces expenditure cuts to curb ballooning budget deficit
12 Oct 2014, 7:47 PM
Zaheena Rasheed
The Finance Ministry has cut back on planned development projects and reduced recurrent expenditure by 20 percent in an effort to curb a ballooning budget deficit.
A circular issued by the ministry on September 28, and publicised today, has assured that wages and allowances will not be affected.
The initially projected MVR1.3 billion deficit in this year’s record budget is now expected to rise to over MVR4 billion due to shortfalls in revenue and increases in unplanned expenditure – in particular the raising of pensions from MVR2300 to MVR5000.
Tourism Minister Ahmed Adeeb had pledged to raise revenue for elderly pensions through T-bill sales, but Finance Minister Abdulla Jihad admitted in August that the government had been forced to rely on the state budget for the handouts.
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