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Sheikh Mohammed approves Dh57.1 billion Dubai budget for 2021

Dubai - The budget for the current year had a spending allocation of Dh66.4 billion.


Issac John

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Published: Sun 27 Dec 2020, 11:47 AM

Last updated: Mon 28 Dec 2020, 12:16 AM

Dubai on Sunday unveiled a growth-oriented 2021 budget that seeks to accelerate the pace of economic recovery, strengthen social benefits and enhance infrastructure.

His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE, in his capacity as Ruler of Dubai, approved the budget that projects a total spending of Dh57.1 billion and revenues of Dh52.31 billion, reflecting an expansionary fiscal policy aimed at enhancing the emirate’s competitiveness.

The budget for the current year had a spending allocation of Dh66.4 billion. “The newly-announced budget takes into account the exceptional economic conditions of the fiscal year 2020 and the repercussions of the Covid-19 pandemic on the global economy,” said a statement by the Dubai Media Office.

The budget also factors in the requirements of population growth and the benefits resulting from hosting Expo 2020 and the continuous development of the infrastructure. It also supports the goals of Dubai Plan 2021, said the statement.

“The government seeks to expand the outsourcing of services to the private sector to enhance its engagement in economic development, which will contribute to improving the wellbeing and happiness of citizens and residents.”

The overlapping allocation for salary and wage allowances across all sectors will account for 35 per cent of the total spending. Grants and support expenditures will constitute 26 per cent in order to meet the requirements of human and community development and provide public services to Dubai residents.

Spending for the social development sector, including health, education, housing, women and children’s care, represents 31 per cent of total expenditure. In line with the priority given to security, justice and safety, 22 per cent of the total expenditure has been allocated to support this sector.

The budget has allocated one per cent of the spending to the private reserve. It also has set aside six per cent of the expenditure to serve the public debt in order to ensure a disciplined fiscal policy.

The budget has allocated nine per cent of the expenditure to maintain the volume of investments in infrastructure in line with Dubai’s aspirations to be the world’s most preferred destination to live in. Overall, the infrastructure and transportation sector will have an allocation of 41 per cent of the total spending.

Mattar Mohammed Al Tayer, director-general and chairman of the Board of Executive Directors of the Roads and Transport Authority, said the budget would enhance the competitiveness of Dubai and speed up “the construction of vital infrastructure projects aimed at delivering top-class services and bringing happiness to citizens, residents and visitors alike”.

Al Tayer said the RTA would direct the allocation for the infrastructure and transportation sector to develop strategic roads and transport projects and complete a host of key projects, including Al Shindagha Corridor (including the Infinity Bridge), and the improvement Dubai-Al Ain Road and Rashid Bin Saeed-Ras Al Khor Corridor.

Despite the economic incentive measures adopted by the government to reduce some fees and freeze fee increases, Dubai is expected to achieve total revenues of Dh52.314 billion.

While oil revenues account for four per cent of the total projected revenues, non-tax revenues, which come from state fees on various services, account for 59 per cent of the total expected revenues, while tax revenues account for 31 per cent and government investment revenues six per cent.

“The budget demonstrates continued efforts to develop revenues, raise the spending efficiency and increase the level of private sector engagement. It also confirms Dubai’s ability to deal with the crisis, restore the pace of economic growth and adopt policies that achieve growth, economic stability and financial sustainability in the medium and long term,” said the statement.

“Dubai’s new budget will continue to support social, health, educational and cultural services as well as investments in infrastructure services in the emirate, as part of the objective of making Dubai one of the world’s best cities to live in,” it said.

Strategic Plan 2021 is a key pillar in Dubai’s journey towards the future, said Abdulrahman Saleh Al Saleh, director-general of the Department of Finance (DOF) of the Government of Dubai. Highlighting the impact of the pandemic on public finances, particularly in terms of declining revenues, Al Saleh said this led to measures being taken by the government to decrease operational spending and strengthen investment spending.

“Initial estimates for 2021 suggest that GDP will see four per cent growth, supported by continued recovery of economic activities. The government will continue to enhance the role of the private sector so it can serve as one of the main engines of economic growth,” said Arif Abdulrahman Ahli, executive director, Planning and General Budget Sector at DOF.

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