Block grants issued to local councils increased by 11.3 per cent during the first five months of the year, according to figures released by the Ministry of Finance and Public Enterprises.

Statistics released by the ministry show that councils received MVR 1.04 billion in block grants between 1 January and 4 June 2026, compared with MVR 897.1 million during the same period last year.

Block grants have been allocated to local councils through the State budget since 2020 to strengthen their financial independence and enable councils to implement small and medium-sized development projects within their communities.

The increase comes as the Government continues measures aimed at expanding the financial capacity of local councils. The current Administration has proposed amendments to increase the share of block grants allocated to Women's Development Committees from 5 per cent to 10 per cent, while also allocating uninhabited islands to councils to help generate additional revenue.

Amendments have also been introduced to allow councils to obtain financing from banks while increasing accountability for their financial management. The Government has said the changes are intended to provide councils with greater financial flexibility while strengthening their ability to carry out development projects and deliver services.

In addition, the Government has launched a programme to construct new council office buildings across the country to improve service delivery and strengthen institutional capacity. The new council office buildings in 50 islands are expected to be completed by the end of July.