PUTRAJAYA, March 5 — The National Finance Council (NFC) has agreed to increase the grants provided by the federal government to state governments, with the total amount expected to reach RM10.5 billion this year, said Prime Minister Datuk Seri Anwar Ibrahim.

Previously, federal government grants increased to RM10.3 billion last year from RM8.1 billion in 2022

Anwar, who is also the finance minister, said the increase reflects the Madani Government’s commitment to strengthening the financial position of state governments to support socio-economic development and infrastructure across the country. He said the increase involves, among others, the shared list grants, state road maintenance grants, and the distribution of tourism tax revenue.

“This increase follows the rise in the capitation grant rate (known by its Malay acronym PMBO) starting in 2026, as outlined by the Madani Government,” he said today in a statement after chairing the 2026 National Finance Council meeting here today.

Capitation grants are federal funds provided to states based on population size. — Bernama

 Malay Mail – Malaysia