Ministry to propose nearly MVR 40 million for 2020 state budget

The 2020 state budget is estimated to reach MVR 39.6 billion, according to the Finance Ministry’s ‘2020-2022 Medium Term Fiscal Strategy’.

The report was compiled based on the figures acquired by June this year, and was submitted to parliament on July 31.

It notes that budget for the year 2020 is estimated to be MVR 39.6 billion, of which total expenditure is estimated to be MVR 37 billion.

According to the ministry, although the total budget of the year 2022 would be higher with the repayment of Sovereign Bond, expenditure would be maintained at the same level as year 2020 by reducing spending on New Policy Initiatives during that year.

If the government is able to maintain the budget deficit at 6.5 percent of GDP as noted in the report, new programs and projects is estimated to receive a “fiscal space” of MVR 5.5 billion.

The ministry also estimates a recurrent expenditure of MVR 20 billion, and MVR 11.7 billion for capital expenditure.

The overall fiscal balance at the end of 2019 is a deficit of MVR 221.4 million.

The finance ministry is to submit the proposed 2020 state budget 2020, before Thursday.

As mandated by law, 31st of October, which falls on a Thursday this year, is the deadline for proposing the state budget for every year.

The proposed budget must consist of the upcoming year’s estimated expenditure and profit, as well details of the previous year’s financial records.

The People's Majlis passed a MVR 30.2 billion state budget for 2019, it was increased to MVR 32 billion in August this year following a request from the finance ministry.