The Government of the Maldives has allocated USD 97 million to be provided to local councils as a block grant in the proposed state budget for 2022.
The government is required to provide the block grant as part of the amendments brought to the Decentralisation Act in 2019. The amendments dictate that 5% of the estimated yearly state income and 40% of the revenue received from land leases should be distributed to local councils.
The amount is to be calculated using a fiscal formula by the Ministry of Finance and distributed to local councils as a block grant. As such, the government plans to distribute USD 97 million to local councils as grants in 2022, which is 20% more than the amount distributed in 2021.
Further, 72% of the block grant will be distributed to island councils, 19% will be distributed to city councils, and 9% will be distributed to atoll councils. The government allocated 5% of the estimated state revenue for 2022 as the block grant, which is USD 55 million of USD 1.6 billion in estimated state revenue.
The block grant also includes USD 46 million in revenue from land leases.