As part of its economic reform agenda to reduce government expenditure, the Privatisation and Corporatisation Board (PCB) has announced that the maximum salary and benefits for senior executives of state-owned companies will be capped at MVR 90,000 for the next two years.
In a circular issued today, PCB stated that this cost-cutting measure applies to all government-owned companies except banks. However, technical staff working in these companies are not included in the salary limitation. Foreign directors are also exempt from this rule.
If the salary and benefits of non-technical employees exceed MVR 90,000, the excess amount must be deducted, and necessary changes must be made to employment agreements, according to the circular.
This move follows President Dr. Mohamed Muizzu’s decision in October to reduce salaries by 10% for political staff, senior officials of the three branches of government, heads of independent institutions, and members of parliament for two years. Additionally, the president opted to forgo 50% of his own salary, reducing it to MVR 50,000.
To further curb government spending, the president also ordered the dismissal of 228 political appointees, a decision expected to save the state MVR 5.7 million per month. However, details regarding the individuals dismissed have not been disclosed.
The government has emphasized the need for these cost-cutting measures due to rising national debt and a weakening economic situation.