Parliament on Thursday passed a record MVR37.8 billion (US$2.4 billion) budget for 2020 after increasing the proposed expenditure by an additional MVR366 million.
After a month-long review by committee and lengthy floor debates, the budget was approved with 77 votes in favour from the 87-member house. Kaashidhoo MP Abdulla Jabir cast the sole dissenting vote whilst most opposition lawmakers did not vote.
The budget review committee added funds mainly for infrastructure projects under the record MVR10 billion Public Sector Investment Programme. The committee proposed plugging the resulting higher deficit with the sale of more treasury bills than planned.
The deficit was previously forecast at MVR5.7 billion or 5.8 percent of GDP. It is now expected to increase to 6.2 percent of GDP. In addition to selling T-bills and bonds in the domestic market, the government also plans to sell a US$300 million ‘samurai bond’ in Japan.
Some MVR1.9 billion was earmarked for debt repayment.
The forecast for revenue and grants of MVR30 billion includes MVR2.5 billion expected from new revenue raising measures such as an income tax, leasing islands for resort development, changing foreign labour quota fees and work permit fees, and basing the airport service charge on ticket classes.
Key projects for 2020 include relocating the main seaport from Malé to the reclaimed Gulhifalhu lagoon, starting work on a new bridge to connect the capital to the new commercial harbour via the suburb Vilimalé, continuing work on the new passenger terminal at the Velana International Airport, developing tertiary hospitals in five regions and beginning construction of 10,000 housing units.
Other plans include upgrading fish canneries and building three new technical and vocational training institutes as well as homes for the elderly in Hulhumalé and Laamu Gan and a children’s home in Addu City
As pledged during the presidential and parliamentary campaigns, a block grant of MVR1.6 billion was allocated for local councils.