Development Spending Is Down. Does That Mean Government Is Spending Better?

Government development spending is down, but spending less does not automatically mean spending better.

What matters is where the reductions are happening. Controlling wasteful running costs can help improve public finances. Spending less on essential infrastructure, however, can leave communities waiting longer for schools, healthcare facilities, water systems and other services.

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The latest Public Sector Investment Programme (PSIP) figures show that spending reached MVR 4.81 billion as of 8 October 2026, down from MVR 6.12 billion at the same point last year. That is a decline of MVR 1.31 billion, or 21.4 per cent.

According to the Ministry of Finance and Public Enterprises’ Weekly Fiscal Development figures, approximately 58 per cent of the MVR 8.31 billion approved PSIP budget had been spent, leaving MVR 3.50 billion unspent as of that date.

Where spending fell

Transport infrastructure accounted for the largest monetary decline. Spending fell from MVR 4.01 billion to MVR 1.93 billion, a decrease of MVR 2.08 billion, or 51.8 per cent.

That reduction alone was larger than the overall fall in PSIP spending. Increases in other sectors partly offset it.

Climate mitigation and adaptation spending fell by MVR 177.3 million to MVR 55.3 million. Pollution control expenditure declined by MVR 86.8 million to MVR 98.5 million, while agriculture and fisheries spending fell by MVR 81.3 million to MVR 64.6 million.

Water resource management spending decreased by MVR 57.5 million to MVR 22.1 million. Urban development expenditure fell by MVR 24.5 million to MVR 38.7 million.

Government administration recorded the largest percentage decrease, at 97.1 per cent. Spending fell from MVR 20.8 million to MVR 0.6 million. While that represents an almost complete drop from its previous level, the monetary decrease was much smaller than transport’s.

These are comparisons of actual spending as of 8 October in each year. They do not, by themselves, show that budgets were cut or projects cancelled.

Where spending rose

The decline was not across the board.

Primary and secondary education recorded the largest monetary increase, rising by MVR 290.5 million to MVR 386.8 million.

Land management expenditure under general public services increased by MVR 265.2 million to MVR 651.6 million. Energy and utilities spending rose by MVR 217.6 million to MVR 257.7 million.

Water and sanitation spending increased by MVR 112.6 million to MVR 253.4 million, while sports and recreation expenditure rose by MVR 95.1 million to MVR 156.7 million.

Public housing spending increased by MVR 65.5 million to MVR 334 million. Religious services expenditure rose by MVR 59.4 million to MVR 101.8 million, and healthcare infrastructure spending increased by MVR 55.5 million to MVR 302.8 million.

Capital spending takes a smaller share

The historical expenditure breakdown accompanying the infographic adds another part of the picture.

Capital spending accounted for 31 per cent of expenditure in 2024. Its share fell to 15 per cent in 2025 and stood at 14 per cent as of 8 October 2026. Recurrent expenditure accounted for the remaining 86 per cent in 2026.

These figures show how spending was divided within each year. They are not percentage increases or decreases in expenditure. A smaller capital share does not necessarily mean a smaller amount was spent in rufiyaa.

The 2026 figure also covers only part of the year, so it should be read separately from the full-year figures. The PSIP comparison, meanwhile, shows an actual monetary decline against the same point in 2025.

Why the spending mix matters

Capital spending pays for assets that serve the public over many years, such as schools, hospitals, water systems and transport infrastructure. PSIP forms a major part of that investment.

When essential projects are delayed or scaled back, people can wait longer for better services. Lower spending may improve the immediate expenditure figures without resolving the needs those projects were meant to address.

Recurrent spending covers the ongoing costs of government and public services. Reducing waste in those costs can help improve public finances, but not everything in this category is expendable. It also pays for teachers, healthcare workers, medicines and maintenance.

Capital spending needs scrutiny too. A costly project is not necessarily a useful one, and spending more does not guarantee better results.

The question is whether the government is controlling unnecessary costs while protecting essential services and worthwhile investment. Lower spending alone cannot answer that. We also need to know what has been delayed, what has become more efficient and what the public is getting for the money spent.