Government Allocates USD 162.1 Million for 2027 Council Grants to Boost Development

The Maldivian government has earmarked USD 162.1 million for council block grants in 2027, signaling a continued commitment to strengthening local governance and infrastructure. The Ministry of Finance and Public Enterprises has formally instructed all councils to submit their detailed budget projections for the 2027 through 2029 period by September 18, 2026. This timeline ensures that the State budget is prepared and presented to the Maldivian Parliament at least two months before the start of the financial year. In accordance with the established Principles for Determining Grants, councils must prepare budgets that do not exceed the government's projected allocations for the three-year window. However, final budgets will remain provisional until the Parliament approves the final state allocations for the coming year. The ministry further clarified that council budgets must maintain a clear distinction between revenue and expenditure. These estimates are required to encompass government block grants, conditional grants provided through various state institutions, council trust funds, and other revenue generated internally by the councils. The financial trajectory shows a clear upward trend in support for local authorities. The 2027 projection of USD 162.1 million follows a record-breaking 2026 budget, which allocated USD 160.2 million. This represents a substantial increase compared to 2023, where USD 136.2 million was budgeted, and 2024, which saw USD 142.7 million. To date, USD 81.1 million has been disbursed under the current block grant scheme, with the Malé City Council continuing to receive the largest share of funding. Beyond the funding levels, the government is overhauling the grant system to ensure greater efficiency and equity. With the abolition of atoll councils, the administration has announced that a higher proportion of funds will now be directed specifically to island and city councils. A pivotal shift is also being made in the allocation formula; future grants will now account for the land area of islands instead of relying exclusively on population data. These reforms are designed to bolster the financial capacity of councils, allowing them to implement development projects more effectively. By factoring in land area, the government aims to address the unique geographic challenges of larger islands, ensuring that resource distribution better aligns with the actual needs of the communities they serve.