Economic Minister Mohamed Saeed said on Sunday that the government decided to cut the subsidy on staple foods not to shore up its finances, but to increase spending on development.
He made the remarks on PSM’s Raajje Miadhu Programme on Sunday evening while providing details about the recently revised policy on food subsidies. The government revised the policy to ensure the benefits reach the deserved beneficiaries, he said, adding that many who are not eligible were receiving food subsidies due to flaws in the system.
Prior to the change, visitors and around 170,000 foreign workers were benefiting from the subsidy intended for financially disadvantaged households.
He further rejected reports that the Government had completely stopped subsidising the prices of staple foods.
Before the implementation of the policy, the government had been contributing 65 to 70 percent of funds required to import staple foods through State Trading Organisation (STO).
Under the revised policy, each eligible individual will receive MVR40 per month as food subsidy.
With the implementation of the policy on Saturday, 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.