PUTRAJAYA: Grants for state governments will be increased this year, with the total amount expected to reach RM10.5bil, says Prime Minister Datuk Seri Anwar Ibrahim.
Federal Government grants totalled RM10.3bil last year, up from RM8.1bil in 2022.
Anwar said the increase reflects the Federal Government’s commitment to strengthening states’ financial position to support socio-economic and infrastructure development.
He said the increase involves, among others, Shared List grants, state road maintenance grants and the distribution of tourism tax revenue.
“This increase follows the rise in the capitation grant rate starting in 2026,” he said in a statement after chairing the 2026 National Finance Council Meeting.
Capitation grants are federal funds provided to states based on population size.
Anwar said the council also agreed that all grants under the Shared List would be disbursed earlier in conjunction with the Visit Malaysia 2026 campaign and to fully allocate tourism tax collections to the respective states.
“The Federal Government will channel 100% of tourism tax collections to the respective states, compared with the current practice, which allocates 50%.
“The council also agreed to improve the state road maintenance grant by expanding its scope to include the procurement of modular steel panel bridges (Bailey bridges), repair works and the widening of drains and ditches along state roads,” he added.
Anwar reiterated the Federal Government’s commitment to be open to working closely with all state governments, regardless of political stance.
“Improvements to these grants are important to accelerate socio-economic development and critical infrastructure so that we can stand as equals as one nation.”
The meeting was also attended by Deputy Prime Ministers Datuk Seri Dr Ahmad Zahid Hamidi and Datuk Seri Fadillah Yusof, Finance Minister II Datuk Seri Amir Hamzah Azizan, along with state leaders and representatives.
