Gov’t Announces MVR 2,450 Monthly Subsidy for Poorest 20 Percent

The government has announced a new monthly subsidy of MVR 2,450 for the 20 percent of the population identified as the most financially disadvantaged, aiming to better support low-income households. 

This measure is part of a shift towards targeted subsidies, designed to provide direct assistance to those in greatest need. According to the latest budget report from the Ministry of Finance, MVR 900 million has been allocated for these targeted subsidies in the upcoming fiscal year. 

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This shift comes in response to data showing that current blanket subsidies disproportionately benefit wealthier households; as it stands, 43 percent of subsidies go to the wealthiest 40 percent of the population, while the poorest 20 percent receive only 17 percent of the aid.

Set to take effect in April 2025, the new subsidy policies are expected to offset an estimated MVR 1,770 rise in monthly expenses for the lowest-income households as the reforms roll out. The Ministry of Finance has pledged that the subsidies provided will exceed this amount to ensure meaningful support.

Subsidy amounts for each household will be determined based on the total household income, with the Ministry emphasising that these reforms are intended to significantly improve the financial stability of those most in need.

Initially, the targeted subsidies will cover essentials such as staple foods, fuel, electricity, and sewerage. To access these subsidies, households will need to apply, and the Ministry is collaborating with local councils to streamline the application and distribution process for maximum convenience.

By restructuring the subsidy framework, the government aims to reduce financial inequality and make support systems more effective for disadvantaged households across the nation.