Government Subsidies Increased for 2026, Highest Rise in Miscellaneous Aid

The estimated national budget for 2026 shows a significant rise in government spending on subsidies and financial assistance, with the most notable increase recorded in miscellaneous aid.

According to the estimated national budget, allocations for 2026 reflect increases across several key areas compared to 2025. Expenditure on electricity subsidies has nearly doubled, rising from MVR 379.46 million to MVR 730.22 million. Assistance to make food more affordable also saw a sharp increase, jumping from MVR 93.13 million to MVR 344.42 million.

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Support for single parents more than doubled, increasing from MVR 78.43 million in 2025 to MVR 211.60 million in 2026. President Mohamed Muizzu had recently announced that the allowance for single mothers will be raised from the current MVR 2000 to MVR 3000 in the upcoming year. 

Health insurance spending also rose, from MVR 1.85 billion to MVR 2.02 billion, while financial assistance to local councils increased from MVR 2.16 billion to MVR 2.47 billion.

Among sectoral subsidies, fuel support saw one of the largest jumps — more than doubling from MVR 433.74 million to MVR 1.06 billion. Fishermen’s subsidies increased to MVR 280 million from MVR 210 million, while allocations for waste management rose slightly to MVR 87.8 million. Subsidies for sewage systems also climbed from MVR 94 million to MVR 135.6 million.

In contrast, transport subsidies fell from MVR 410.68 million to MVR 250 million, and housing subsidies were omitted entirely from the 2026 budget. 

The largest overall increase was observed in miscellaneous aid, which rose sharply from MVR 134.8 million in 2025 to MVR 1.04 billion in 2026 — the highest recorded rise among all categories.

The 2026 budget signals a clear expansion of government spending on subsidies and welfare assistance, but the sharp rise in allocations, particularly in miscellaneous aid, raises questions about fiscal sustainability and spending transparency.

While increases in electricity, food, and fuel subsidies may help ease immediate cost-of-living pressures, such heavy reliance on state-funded assistance could strain public finances if not matched by revenue growth. The tenfold jump in miscellaneous aid, without detailed disclosure of its components, also invites scrutiny over how these funds will be distributed and monitored.