Bahrain’s budget stalemate could be about to end after a new-look version was given the green light by parliament’s financial and economic affairs committee.

That is despite the revised version increasing the projected budget deficit by a total of BD28 million ($73.6 million) over the two-year period, said a report in the Gulf Daily News (GDN), our sister publication.

The committee held an urgent meeting yesterday after the government agreed to meet parliament and the Shura Council halfway on some key demands.

In the new version, which is supported by the government, subsidies would not be axed without approval by a joint committee representing the government, parliament and Shura Council, with plans to scrap meat subsidies up for negotiation.

It also increases disabled allowances from BD100 to BD200 a month depending on disability, while pensioners getting monthly pensions of less than BD700 would receive a one-off bonus of BD360 this year – rather than BD30 a month originally sought by parliament and the Shura Council.

As a result the budget deficit, originally estimated at BD1.474 billion this year and BD1.563 billion next year, will increase to BD1.504 billion in 2015 – but drop to BD1.505 billion in 2016.

Parliament will meet for an extraordinary session to vote on the budget on Thursday, followed by a Shura Council vote on Sunday.

“We have a $60 oil price (on which to calculate the budget), which is lower than international market rates, yet we managed to get a bonus for pensioners and more directed towards projects,” parliament financial and economic affairs committee chairman Isa Al Kooheji told a Press conference yesterday.

“The deficit has increased by BD28 million (overall) since subsidies are still being revised, with their allocated spending kept the same, and the changed policies will be implemented when a consensus is reached between all three parties.”

Committee vice-chairman Nasser Al Qaseer said the revised budget made more sense since spending had been redirected.

“The original format had non-deserving ministries and bodies getting huge budgets they don’t need and they are spending less than what they get by half,” he said.

Committee secretary Khaled Al Shaer claimed it was a victory for parliament, saying MPs’ pressure had paid dividends.

“They wanted to build cricket pitches at a cost of BD10m, which they denied, but we went through their original documents and they later agreed to scrap them as an example,” he said.

“Huge spending goes on administration, but new policies could ensure more is done in less time and for less expense.”

Shura Council financial and economic affairs committee chairman Khalid Al Maskati said his team would meet over the weekend before recommending whether the budget should be approved.

“The budget is already delayed by six months and we want projects to be pushed ahead in the most effective, cost-saving and fastest way possible in line with international changes,” he said.

“People are also waiting for new allowances and we want to help them so the speedier we work, the speedier they will get their payments backdated.”

Revenues have now been recalculated in the new-look budget and anticipated income could rise by BD41 million this year and BD90 million next year.

In the new-look budget BD20 million would be pumped into the budget from Eskan (Housing) Bank in 2016 and additional spending would be sanctioned for various government bodies.

If approved, the General Organisation for Youth and Sport (Goys) will get an additional BD3m this year and BD4m next year, while the Labour Market Regulatory Authority (LMRA) and the National Institution for Human Rights (NIHR) would get an extra BD1m each year.

Meanwhile, Bahrain University’s budget would be increased by BD300,000 this year and BD1.7 million next year.

Parliament and Shura Council’s budget will be increased by BD12 million this year and BD3 million next year to cover retirement packages for those serving in by-elections and other costs.

The Housing Ministry will also get an extra BD30 million for both years to speed up projects, while financial support for Gulf Air would be slashed by BD10 million this year and BD20 million next year.

The government has postponed separating its accounts from Bapco until 2017, which is expected to save BD150 million in the budget, based on parliament’s request.

Meanwhile, the Works, Municipalities and Urban Planning Affairs Ministry would see BD25 million directed towards the works sector next year, plus BD5 million this year and BD10 million next year for the municipalities sector. - TradeArabia News Service