The proposed State budget for next year allocates MVR 2.5 billion as block grants for local councils, aimed at supporting decentralised governance and improving public services across the country.

The block grants will be distributed through a fiscal formula in line with the Decentralisation Act. The budget also includes measures to strengthen the spending framework to ensure that funds are directed toward communities and individuals most in need.

The Government has also decided to grant financial independence to the judiciary. For the first time, expenditure for the judiciary will be provided as a direct grant rather than through conventional budget allocations. The judiciary sectoral grant is set at MVR 807.9 million, an increase of MVR 250 million compared to the current year’s spending.

The budget projects a 31.7 per cent rise in capital expenditure, reaching MVR 9.3 billion due to the Government’s plans to continue this year’s Public Sector Investment Programme (PSIP) policy, with additional infrastructure development projects scheduled for implementation next year.