Nasheed raises concerns over committee's budget approval
Nasheed also expressed concern over the budget MVR 5.8 billion supplementary budget approved for the year.
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Speaker Mohamed Nasheed has written a letter to the parliament's budget review committee, highlighting the lack of clarity in approving the budget sent by the government for next year.
Nasheed, in a letter to Kinbidhoo MP Mohamed Nashiz who chairs the budget committee, also expressed concern over the budget MVR 5.8 billion supplementary budget approved by the committee for this year along with the 2023 budget. The 19-point letter includes:
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While the economy is expected to grow next year due to an increase in tourist arrivals, it is not clear what will drive the increase in tourist arrivals next year as the occupancy of tourist establishments is currently at 60%
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While it has been said that inflation can be contained because of subsidies, it does not mention the impact on foreign exchange reserves due to higher commodity prices and increased cost of subsidies
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While GST hike is likely to raise inflation to 2.2%, there is no clarity on how it was projected
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Budget does not have projections of impact on inflation when subsidies change next year
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The country does not have enough foreign currency to support the country's imports next year as balance of payment is expected to be $1.1 billion
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The official reserve figures mentioned in the budget committee report do not match the central bank's latest figures
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While the budget committee's report recommends to the government to take steps to increase foreign exchange revenues and reduce pressure on foreign exchange reserves, it does not specify the steps to be taken
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While the committee report has outlined four fiscal strategies that can be adopted to sustain the country's debt, the committee report does not mention how monitoring will be carried out
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No details on how to secure the estimated MVR 1.5 billion in grants
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While parliament has approved and recommended restructuring of debt to creditors except foreign parties, it has not clarified how the implementation has gone
'Unapproved expenses confirmed'
Nasheed's main concern with regard to the supplementary budget of MVR 5.8 billion approved by the committee this year as proposed by the government was that the government had spent money without being approved by parliament. In his letter, he expressed concerns that these expenses were in violation of the Public Finance Act and regulations.
He said:
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An additional 5.8 billion to be spent this year not only due to higher commodity prices, but also to increase subsidy costs
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The additional funds will also be used to fund the increase in salaries of teachers, funds to be released to meet HDC expenses, and increased post-Covid budgets of offices
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While the finance ministry has said that it has not incurred unapproved expenses in view of the increase in expenditure this year, the budget committee's report confirms that it has already been done so
