Parliament expedites MVR1.7bn supplementary budget

A supplementary budget submitted for parliamentary approval by the finance ministry is due to be put to a vote on Monday night.

Speaker Mohamed Nasheed sent the budget to a committee at the start of Sunday’s sitting and urged lawmakers to complete its review within a day. The former president said he intends to schedule a sitting for Monday night to approve the budget. MPs will have until Monday night to propose amendments, he said.

Parliamentary approval was sought for MVR1.7 billion (US$110 million) in additional spending. The forecast for expenditure in the record 2019 budget was MVR27 billion.

The fiscal deficit is projected to increase from MVR4 billion to MVR4.9 billion.

The finance ministry told the media that a supplementary budget was needed because expenditure out of contingency funds was higher than expected due to large sums awarded in compensation claims against the state.

The government also wanted to allocate funds for key programmes and projects envisioned in the ruling party’s manifesto.

The 2019 budget was formulated before President Ibrahim Mohamed Solih took office on November 17. His transition committee on finance said they were unable to incorporate many manifesto pledges due to a lack of time and fiscal space.

Finance Minister Ibrahim Ameen told the press last week that the government was not facing cashflow problems. Grant aid from foreign partners has exceeded forecasts with MVR1.9 billion collected so far, he said, which would also need to be allocated through the supplementary budget.

According to weekly fiscal data released by the finance ministry, expenditure stood at MVR14.7 billion as of August 15, outstripping revenue and grants of MVR14.5 billion.

“The majority of expenditure during this period was spent on recurrent expenditure; salaries and wages, and allowances to employees,” the ministry explained. “Notable spending on capital expenditure include [the Public Sector Investment Programme], Investment Outlays and Lendings.”

Last week, Speaker Nasheed announced his intention to schedule extra sittings to complete debate on several bills and resolutions before parliament breaks for recess. Under the standing orders, sittings are normally held in the morning from Monday to Wednesday but Nasheed said he would schedule sittings on Sunday and Thursday and hold sittings at night as well.