MVR 2.2 Billion Block Grants to be Disbursed to Empower Councils

The state budget for the upcoming fiscal year is set to disburse MVR 2.2 billion as block grants to councils, in accordance with revisions made to the Decentralisation Act. 

This financial injection aims to address the budgetary requirements of local councils, enhancing their ability to cater to community needs.

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Scheduled for 2024, the allocated MVR 2.2 billion is designated primarily to support Island councils, representing the largest share of the block grant at 70%. City councils will receive 20% of the grant, while Atoll councils are allotted 10%.

The Ministry of Finance highlighted that the councils’ ability to generate revenue independently will directly influence the portion of the block grant they receive. As councils generate more revenue, the reliance on government funding decreases, subsequently leading to reduced financial support. 

This strategy is intended to incentivise councils with lower block grants to bolster their independent revenue sources.

Crucially, revenues from fees for council services and land rentals within council jurisdiction will be redirected directly to the respective councils. Moreover, income from annual fees for road and sea vehicles will be attributed to the Island council in the area where the vehicle operates.

Notably, councils have been granted the authority to execute projects valued under MVR 5 million in rural areas. Additionally, they are empowered to engage in commercial activities under their own banner.