State budget 2020 submitted to Majlis

The proposed state budget for the upcoming year has been submitted to parliament.

It was submitted on Thursday, by the finance ministry.

As per the Public Finance Act, the proposed budget for the upcoming year must be submitted two months prior to year end.

Earlier this week, Finance Minister Ibrahim Amber assured that the 2020 state budget will be submitted to parliament within the required time, but did not reveal any further details.

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

According to the ‘2020-2022 Medium Term Fiscal Strategy’ report compiled by the finance ministry in June, the state budget is estimated to reach MVR 39.6 billion.

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 2020 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 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.