Kuala Lumpur: The rate of capitation grant distributed to state governments will be increased by 25 per cent, or RM109 million, to RM548 million effective from 2026. Prime Minister Datuk Seri Anwar Ibrahim, who is also the Finance Minister, announced that the new rate was approved during the 2025 National Finance Council meeting he chaired this morning. He highlighted that this marks the first review of the capitation grant rate since 2002, reflecting the MADANI Government’s commitment to aiding state governments in providing services to the populace.
According to BERNAMA News Agency, the National Finance Council also sanctioned enhancements to the Ecological Fiscal Transfer for Biodiversity Conservation’s (EFT) implementation guidelines. Anwar emphasized the MADANI Government’s dedication to environmental preservation and conservation, evidenced by the increase in the EFT allocation from RM150 million in 2023 to RM200 million in 2024, with a further rise to RM250 million for this year.
Anwar stated that Federal Government grants to state governments amounted to RM9.3 billion in 2024, with the figure set to increase to RM9.8 billion this year for the benefit of all Malaysians. He also mentioned that the Federal Government will implement inclusive development this year, aligning newly approved development projects in Budget 2025 with each state government’s priorities.
Additionally, he noted that the allocation for agricultural programs in collaboration with state governments has been doubled to RM300 million for this year from RM150 million in 2024. The National Finance Council’s meeting, held annually, serves as a negotiation platform between the federal and state governments on financial matters.
Today’s meeting was attended by Deputy Prime Ministers Datuk Seri Dr Ahmad Zahid Hamidi and Datuk Seri Fadillah Yusof, alongside senior federal and state officials. Notable attendees included Sarawak Premier Tan Sri Abang Johari Tun Openg and Sabah Finance Minister Datuk Seri Masidi Manjun, who represented Chief Minister Datuk Seri Hajiji Noor. Also present were Selangor Menteri Besar Datuk Seri Amirudin Shari, Johor Menteri Besar Datuk Onn Hafiz Ghazi, Kedah Menteri Besar Datuk Seri Muhammad Sanusi Md Nor, and Terengganu Menteri Besar Datuk Seri Ahmad Samsuri Mokhtar.