Federal govt increases allocations for states

KUALA LUMPUR: The Federal Government has agreed to implement four enhancements to allocations channelled in various forms of grants and support to the state governments for 2021, says the Finance Ministry.

In a statement, it said these included increasing the allocation of RM50mil to RM400mil under the Grant Based on Level of Economic Development, Infrastructure and Welfare (Tahap) to all state governments.

“The increase in the allocation is to finance Ecological Fiscal Transfer activities as an additional incentive to the state governments to ensure the sustainability of the country’s biodiversity, ” said the ministry.

The enhancements were announced yesterday at the virtual National Finance Council meeting chaired by Prime Minister Tan Sri Muhyiddin Yassin and participated by all chief ministers and mentris besar.

The government also agreed to approve a contribution amounting to RM440mil to the State Reserve Fund to assist the state governments experiencing a deficit, manage their financial affairs, and implement development projects.

As for the third enhancement, the council agreed to improve the guidelines for the Federal Government’s Malaysian Road Records Information System, including expanding the definition of state road maintenance.

The fourth enhancement entailed providing an allocation of RM260mil to the state governments to help them implement small-scale projects at the grassroots level, the ministry added.

It said the first distribution of RM60mil had been channelled to the states with the maximum limit for each project set at RM100,000 through a ballot method to ensure that the distribution of funds could benefit bumiputra small contractors fairly.

“The Federal Government hopes these grants will be fully utilised by the state governments, especially to protect the welfare and well-being of the people, ” the ministry said. — Bernama

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