The Ministry of Finance has set MVR 2.5 billion for next year’s Council Block Grant.
Block grants were first issued to councils in 2020. Under this system, councils are allocated five percent of state revenue as block grants. While MVR 2.15 billion has been issued released to councils as block grants last year, MVR 2.25 billion was disbursed the year before.
Block grants are provided to councils to invest in community needs, generate income for the councils and deliver municipal services to the public.
A circular issued by the ministry said that under the Public Finance Act, the ministry is required to prepare the annual state budget and submit it to the People’s Majlis two months prior to the start of the financial year. The ministry added that councils mut prepare mid-term budgets and submit them to the ministry.
The ministry further noted that budget-related information must be shared according to the formats specified in the circular. The ministry outlined the items councils must include when preparing their budgets:
- Grants provided by the state as block grants
- Conditional grants provided by government agencies
- Council trust funds
- Additional income earned by councils
The ministry stated that the block grant budget should be prepared in a manner that does not exceed the estimated figures to be allocated to councils from next year through 2029. However, it added that councils will finalize their budgets after next year’s state budget is passed in accordance with the law.