Pre-budget consultation starts in Mauritius

In line with the preparation of the budget document in about three months, the Financial Secretary Ali Mansoor has reworked the limits of budget departments. The relaunch of the Mauritian economy is not yet confirmed.

The Circular Number 7, CF/PBB/PREP/2012, published last week by the Ministry of Finance and Economic Development, to collect suggestions from various ministries for the next three years 2012, 2013 and 2014 states the fears of the financial secretary concerning the current economic situation.

Prime Minister Dr Navin Ramgoolam said, “Our country is going through a difficult phase. Local conditions are largely determined by the international configuration.”
“In fact, domestic private investment continues to be depressed and FDI flows may begin to decline significantly. Consequently, growth prospects are now below previous projections and the current accounts and balance of payments face more pressure”, notes the document.

“The 3-year PBB Strategic Plan should have been formulated to make operational the Ministry’s medium/long term plan and reflect its 10 year Infrastructure Plan which should be the vehicle to achieve a Rs 1 trillion economy that is and more equitable” states the document.

Circular no 7 of the document is part of the implementation of Programme Based Budget, which is a budget rationalisation programme. The ministries have until August 29 to submit their proposals for expenditure to be incurred by their departments.

Growth projections have been revised to 4 per cent for the period 2012 to 2014, a decline in growth resulting, in turn, in lower tax revenues. The document also noted that the pressure of budgetary expenditures continue to rise.

Numerous reasons ask for fiscal prudence: grants and subsidies made by the European Commission under the Accompanying Measures for Sugar Protocol (AMSP) programme come to an end in 2014, and the exercise of fiscal consolidation should continue over the next two years to receive subsidies from the European Union, from Rs 6.5 billion per year.

In addition, efforts should also be to reduce the tax burden of the economy to 50 per cent of GDP until 2018, according to the Public Debt Management Act.

In order to better streamline the budget, efforts should be made by government to reduce expenses. And to the extent possible, increase the charges to use certain public services.