National Social Protection Agency (NSPA) has said that individuals earning less than MVR45 will be considered eligible for food subsidy.
The agency made the announcement at a hearing of the Parliament Committee on Executive Oversight.
Officials of NSPA were questioned by the committee following the Government’s decision to revise its subsidy policy. The Government says the policy was revised to ensure that food subsidies are provided only to financially disadvantaged households.
Chief Executive Officer at NSPA – Mujthaba Jaleel told the Executive Oversight Committee that a household income and expenditure survey conducted by the Economic Ministry shows an individual spends around 2.4% of income on staple foods. 3.6% of the country’s GDP spent on subsidising staple food is very high, compared to other countries, he added.
He said “the breadwinner of a household earning less than MVR45 per day, with regard to the income of the household, is considered as poor and eligible for food subsidies.” Noting that people living on less than MVR29 are officially classified as poor based on international poverty threshold, he said the base limit set in the Maldives is nearly twice that amount.
He also told the committee that NSPA has been received over a hundred subsidy forms on a daily basis.
Speaking at the committee hearing, Managing Director of State Trading Organisation (STO) Ahmed Shaheer expressed confidence of bringing favourable changes to staple food prices in the near future. He further said that “STO is working with the Government to identify ways to reduce the prices of staple foods.”
Before the implementation of the policy, the government had been contributing 65 to 70% of funds required to import staple foods through STO. Under the revised policy, each eligible individual will receive MVR40 per month as food subsidy.
With the implementation of the policy, the price of rice rose from MVR3.98 to MVR7.96 a kilo. The prices of flour and sugar also rose from MVR2.96 to MVR5.96 per kilo, and from MVR4 to MVR8 a kilo respectively. The government spends around MVR310 million on food subsidies every year.