KUALA LUMPUR (April 4): The federal government has affirmed its commitment to support state governments towards ensuring comprehensive and holistic national development via the previously announced improved grants and financial support for each state this year.

This follows the National Finance Council meeting, chaired by Prime Minister Datuk Seri Anwar Ibrahim and attended by the various heads of state governments, which agreed to various allocations including a year-on-year (y-o-y) increase in development expenditure and allocation for grants, according to a statement from the Ministry of Finance (MOF) on Thursday.

The MOF said as much as RM39.4 billion will be provided to states in 2024 for their development projects, up from RM36.7 billion in 2023 and RM28.8 billion in 2022.

The ministry said the federal government has allocated the states RM8.9 billion in grants, versus RM8.3 billion in 2023, and RM8.1 billion in 2022.

These improved grants, announced in Budget 2024, include an increase in state road maintenance grants to RM5.4 billion from RM5.2 million in 2023, grants based on the level of economic development, infrastructure, and quality of life (Tahap) totalling RM400 million, and an increase in ecological fiscal transfer (EFT) grants to RM200 million versus RM150 million a year ago.

Meanwhile, the MOF said the council approved RM300 million in special grants for Sarawak and Sabah for 2024, versus RM16 million for Sarawak and RM129.7 million for Sabah in 2023.

“The increase in grants involves all states and will be provided simultaneously. Therefore, it is my great hope that these grants can be fully used by the state governments to ensure the welfare of the people as well as promote the sustainable state development,” he said,” said Anwar.

The MOF noted that there will also be a 10% increase in grants allocated to state libraries and museums.

Besides the grants, the council also reached an agreement in supporting state government’s preparedness in facing natural disasters such as floods and landslides.

This came in the form of a 10% or RM10 million increase, whichever is lower, to the limit for fund management expenses for state road maintenance and the purchase of a Bailey bridge using provisions of the state road maintenance grant.

“The federal government is committed to collaborating with all state governments in advancing comprehensive national development," Anwar said.

"Based on the principles of humanity and ‘rahmatan lil alamin’ which shape the Madani economy framework, the enhancement of grants to state governments can directly benefit all Malaysians regardless of ethnicity, religion or geography,” he added.