On Monday, the Ministry of Finance submitted a state budget of MVR 34.7 billion for 2021 to the Parliament. It outlined an ambitious plan to increase national income by MVR 1.6 billion in 2021, by introducing six new measures.
Summary of proposed activities and projected revenue:
- Licensing a new telecom operator and frequency spectrum charges: MVR 300 million
- Leasing of land for tourism: MVR 154 million
- Parking fees and congestion charges from Male’: MVR 37 million
- Sale of land to locals: MVR 300 million
- Real estate tourism: MVR 154 million
- Airport development fees and airport service charge: MVR 273 million
A large proportion of the new income-generating measures involve the sale of land to locals. The government has planned to implement this by providing housing to locals on land that has been reclaimed, after which the remaining land will be sold to interested parties. An income of MVR 300 million is projected from this venture.
However, with the recessionary effects of the COVID-19 pandemic this year, businesses and individual incomes have been negatively impacted. By selling land to locals, is it really prudent to expect such a high return? Is there a significant enough demand for such land, considering the current economic climate?
While the proposed measures may appear promising on paper, whether or not the actual figures will line up remains to be seen.