Capital expenditure decrease while recurrent expenses increase

Statistics have shown that capital expenditure of the government decreased by 6.5%, owing to the decrease in expenditure incurred for PSIP projects.

Finance Ministry's Monthly Fiscal Developments statistics showed that the state's total expenditure declined by 23% compared to June 2018, resulting from decrease in capital expenditure.

While a total capital expenditure of MVR 4.4 billion was recorded during the first six months of 2018, MVR 2.6 billion has been utilized from the national budget thus far this year.

Compared to the previous year, a significant decline in spending on PSIPs was recorded this year, with MVR 1.4 billion spent on PSIP compared to MVR 3.7 billion spent during the same period last year.

However, the recurrent expenditure increased by 1.9% compared to the same period last year, mainly driven by a rise in spending on personal emoluments, subsidies, and other grants and contributions, said the report.

Although the revenue generated during June this year decreased, the revenue received during the first six months of the year saw a slight increase compared to the previous year. Tax revenue increased due to improved performance of tourism sector revenues, GRT, ASC, TGST in addition to GGST and BPT.

However, non tax revenues declined as a result of decrement in SOE dividends, Finance Ministry said.

The monthly statistics show the fiscal balance for the month of June 2019 gives an overall surplus of MVR 38.4 million, although MVR 11.8 billion has been utilized from the MVR 30 billion budget allocated for the year.

The government has been facing criticism over delay in implementing infrastructural projects. However, National Planning Minister Mohamed Aslam recently stated that the government would not projects without having a proper plan and giving adequate time to implement the projects effectively.

The government has also sated that they are working on submitting a supplementary budget for parliament approval as the current budget, which was put together by the previous administration, poses challenges in implementing some policies and projects of the current administration.