The 2021 Dubai budget has been approved by the ruler of Dubai, Vice President and Prime minister of UAE, Sheikh Mohammed bin Rashid Al Maktoum. The total spending of the budget is allocated to Dh57.1 billion and revenue of Dh52.31 billion. Despite the economic disruption by covid-19 and decrease in revenues, the new budget emphasizes to revive the economy by spending more on social benefits, continuation to vital infrastructure projects, allocation of stimulus packages for SME and business affected by the pandemic, focuses on financial stability and transparency as a measure of the global standard.
Previously the budget for the fiscal year 2020 had a spending allocation of Dh66.4 billion and which is 14 per cent less in the year 2021 due to shrinking in business activities by the global covid-19 pandemic. “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 from the Dubai Media Office.
Of the total budget for 2021, salary and allowances constitute 35 percent of the total government spending which is in accordance with the new human resource law. The social development sectors like health, insurance, sanitation, housing, women and children care, and education accounts for 31 per cent of total expenditure. Regarding the inevitable sectors namely justice, security, and safety, 22 percent have been allocated in these sectors of the total government spending. Non-tax revenues from various state service fees account for 59% of the total expected revenues, oil-based revenue occupies only 4 per cent while tax revenues account for 31%.
To make sure government revenues and spending are more transparent, this budget has allocated private reserves of 1 percent and public debt of 6 percent of the total spending. “The Dubai budget 2021 would definitely foster the competitiveness of Dubai and has given top priority for ongoing vital infrastructure projects which deliver the top-notch quality of living standard and happiness to the citizens, residents and visitors”, said by Mattar Mohammed Al Tayer, director-general and chairman of the board of Executive Directors of the Roads and Transport Authority.
The 2021 budget seems to be flexible for public investors and sectors so far. Arif Abdul Rahman Ahli, executive director, planning and General Budget Sector at Department Of Finance (DOF) said, “Initial estimates for 2021 suggest that GDP will see four per cent growth, supported by the 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.”
“Dubai’s Strategic Plan 2021 is a key pillar in Dubai’s journey towards the future. He further highlighted Dubai Government’s success in implementing programmes that aim to achieve structural, economic and financial reforms, in addition to launching initiatives to diversify the economic base,” said Abdulrahman Saleh Al Saleh, Director-General of the Department of Finance of the Government of Dubai.
The Dubai economy is expected to contract by 6.2 percent in 2020 and projected to grow by 4 percent in 2021, with the continued efforts to recover the business activities at full pace.