Government increased grants to state governments, totalling RM8.9bil for 2024, says PM

KUALA LUMPUR: The Federal Government has allocated approximately RM8.9bil for grants to state governments this year, says the Finance Ministry.

Prime Minister Datuk Seri Anwar Ibrahim, who chaired the National Finance Council Meeting, underscored the Federal Government’s commitment to collaborate with all state governments in driving comprehensive national development.

Anwar, who was also the Finance Minister, said the Federal Government was committed to working with all state governments in an effort to enhance the country's development in a comprehensive manner.

"Based on the principles of humanity and ‘rahmatan lil alamin’ which shape the Madani Economy framework, the enhancement of grants to state governments can directly benefit all Malaysians, regardless of ethnicity, religion or geography," he said in the statement on Thursday (April 4).

Anwar said the increase in grants involves all states and would be given simultaneously.

"I have great hope that this grant can be used fully by the state governments for the welfare of the people as well as accelerate development in a more sustainable way," he said.

The RM8.9bil grant, approved during the meeting, was an increase compared to RM8.3bil last year and RM8.1bil in 2022.

The grants include enhancements such as an increase in state road maintenance grants to RM5.4bil compared to RM5.2bil in 2023.

Grants based on the "Level of Economic Development, Infrastructure and Quality of Life" (Tahap) totalled RM400mil.

There is also an increase in Ecological Fiscal Transfer (EFT) grants to RM200mil from RM150mil in 2023.

The meeting also approved additional annual special grants to Sarawak and Sabah, amounting to RM300mil, a significant increase from RM16mil for Sarawak and RM129.7mil for Sabah in 2023.

There would be a 10% increase in grants allocated to state libraries and museums for this year.

As for development expenditure, a total of RM39.4bil had been allocated for 2024 to execute state development projects, an increase from RM36.7bil last year and RM28.8bil in 2022.

The council had granted approval for state government applications concerning readiness to address emergencies or natural disasters such as floods and landslides, which may cause damage to roads and bridges.

In addition, the council had approved the purchase of temporary Bailey bridges using the state road maintenance grant allocation (as a one-off purchase) for 2024.

There would be an increase in the limit to fund road maintenance-related management expenses by 10% or RM10mil, whichever was lower.

The ministry said the increase was to ensure the relationship between the Federal Government with all state governments remained intact for the good of the people.