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, the Finance Ministry said.
In a statement today, the ministry said these included increasing the allocation of RM50 million to RM400 million under the Grant Based on Level of Economic Development, Infrastructure and Welfare to all state governments.
“The increase in the allocation is for the purpose of financing ecological fiscal transfer activities as an additional incentive to the state governments to ensure the sustainability of the country's biodiversity,” the ministry said in a statement today.
The enhancements were announced during the virtual National Finance Council meeting today, chaired by Prime Minister Tan Sri Muhyiddin Yassin and participated virtually by chief ministers and menteri besar from all states.
The federal government also agreed to approve a contribution amounting to RM440 million to state reserve funds to assist the state governments, which are experiencing a deficit, to manage their financial affairs and implement respective development projects.
The ministry said the government was aware that most state governments were facing tough times, especially in their financial management post-Covid-19.
As for the third enhancement, the National Finance Council agreed to improve the guidelines for the federal government's Malaysian Road Records Information System system, including expanding the definition of state road maintenance.
“It is hoped that this decision will give the state governments flexibility in carrying out road maintenance work according to priority and urgency, thus ensuring the safety of the people, especially road users,” the ministry said.
The ministry said the federal government was also aware that the state governments were also experiencing a very drastic reduction in revenue post-Covid-19.
The fourth enhancement as such entails an allocation of RM260 million to state governments to help them implement small-scale projects at the grassroots level.
The ministry said the first distribution of RM60 million 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 allocations could benefit small Bumiputera contractors fairly. – Bernama, May 6, 2021
