The Privatisation and Corporatisation Board (PCB) has introduced a salary cap of MVR 90,000 for senior executives of state-owned enterprises (SOEs) as part of the government’s broader effort to reduce expenditure. The decision, effective from January 2024, will remain in place for two years and applies to all SOEs except banks.
According to a circular issued by PCB, the measure aligns with President Dr. Mohamed Muizzu’s economic reform agenda. It mandates that any local executive earning above the set limit must have their salary adjusted accordingly. However, technical staff within SOEs are exempt from this rule. Foreign directors have also been excluded from the salary cap.
In addition to enforcing salary reductions, the PCB has instructed SOEs to amend employment contracts to reflect the new financial restrictions. This follows the president’s earlier directive in October to cut the salaries of political appointees, senior officials across all branches of government, heads of independent institutions, and members of parliament by 10% for two years.
Demonstrating his commitment to fiscal discipline, President Muizzu also announced that he would forgo 50% of his own salary, reducing it to MVR 50,000 per month.
The government has justified these cost-cutting measures as necessary to curb rising national debt and address economic challenges. As part of this effort, President Muizzu also ordered the dismissal of 228 political appointees, a move expected to save the state approximately MVR 5.7 million per month. However, the administration has not disclosed details regarding the individuals affected by this decision.
These measures reflect the government’s strategy to streamline expenses while navigating economic difficulties, reinforcing its commitment to financial stability and sustainable governance.
