Putrajaya approves RM440m for state reserve funds

Govt has also agreed to implement 3 other improvements in allocations for grants and support to state govts for this year

by HARIZAH KAMEL / Pic by RAZAK GHAZALI

THE federal government has approved a contribution of RM440 million to state reserve funds to aid states with their deficits, manage financial affairs and implement their respective development projects.

In a statement yesterday, the Finance Ministry (MoF) said the government was aware that most state governments were facing difficulties, especially in financial management post-Covid-19.

The decision was made during the virtual National Finance Council meeting yesterday, chaired by Prime Minister Tan Sri Muhyiddin Yassin.

Besides that, Putrajaya had agreed to implement three other improvements in allocations for grants and support to state governments for this year.

These include increasing the allocation by RM50 million to RM400 million under the Grant Based on Level of Economic Development, Infrastructure and Welfare to all state governments.

“This allocation is increased to finance ecological fiscal transfer activities as an additional incentive to the state governments to ensure the sustainability of the country’s biodiversity,” it said.

The federal government has also expressed concerns about road safety and will, therefore, improve the guidelines of the Malaysian Road Records Information System.

The MoF said the decision will give flexibility to the states to carry out road maintenance works according to priority and urgency, thus protecting road users.

Lastly, the federal government was also aware that states’ revenues have been drastically reduced due to the pandemic and had agreed to allocate RM260 million 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 Bumiputera small contractors fairly.

“The government is always committed to ensuring that the relations between the federal and state governments are at the best level.

“Therefore, the federal government hopes these grants will be fully utilised by the state governments, especially when it comes to the welfare and wellbeing of the people,” said the MoF.

Separately, Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz announced in the 52nd Laksana Report that a total of RM55.9 billion of i-Sinar withdrawals had been approved, of which RM40.4 billion had been credited involving 6.29 million applicants as of April 16.

On the Wage Subsidy Programme (WSP) 1.0 under the short-term National Economic Recovery Plan, or Penjana, he said 322,177 employers and 2.64 million employees had received benefits.

“As of April 23, the approved wage subsidy applications had already reached RM12.88 billion, a slight increase compared to last week.

“Meanwhile, for the WSP2.0 under Kita Prihatin, collectively RM1.17 billion had been channelled to 73,567 employers to continue operations and maintain wages for 635,748 employees as of April 23.”