New subsidy of MVR 180 mln included in next year's budget

The Finance Ministry has proposed a new subsidy in next year's budget.

The budget presented to the Parliament Monday allocated MVR 180 million as a sewerage subsidy to FENAKA Corporation.

Finance Minister Ibrahim Ameer said that water and sewerage systems would be installed in all inhabited of the Maldives around May and June next year. It is a huge project worth about $134 million -- Rs 2.1 billion, he said.

The minister said after the installation of the sewerage systems, a high cost would be incurred for its repair and maintenance. Currently, there is no arrangement to cover the cost by charging fees from island residents, he noted.

The minister said the new subsidy is included in the budget to avoid the burden on the people. The decision was taken to allocate the money to FENAKA as the utility corporation would spend a significant amount of money on building sewerage and maintaining the sewerage systems, he said.

The government provides subsidies to different government agencies to reduce the price of transport-related services. However, the amount will be given to a separate agency next year, and the amount will be allocated to different sectors through that agency, he said.

MVR 300.6 million has been included in next year's budget for subsidies in transport and related sectors. The budget estimates that between MVR 588 million and MVR 788 million will be spent on electricity subsidies next year, even with changes in subsidy-related policies due to current global oil prices.

In addition, next year's budget includes MVR 169 million as a targeted subsidy for poor households.