Some queries and a request to the Minister of Finance:

1. Do you mean that following your recent discussion with the IMF on the proper calculation of the budget deficit (subsequent to the Rs 64 billion transfer from the BoM), the IMF will go back on its methodology as laid down in the IMF Government Finance Statistics Manual 2014 (GFSM) and treat the exceptional one-off payment of as revenue and not financing?

Why is it that a similar transfer of Rs 18 billion from the BoM in Budget 2019-20 has been treated as a financing item not as revenue? Why this inconsistency?

( The minister was arguing that as the transfer from the BoM did not increase the public sector debt , his “ balanced budget “ argument stands the test. He is not thinking as an economist for whom a budget which has such a destabilizing effect on the economy cannot be a balanced budget. How the budget deficit is being financed is the crucial question!!!)

2. We are still awaiting a circular/documentation from your Ministry , detailing out the reallocation of funds, following your press conference on the measures to boost investment and the economy. Is it because you have every reason to hide the fact that the Rs 6 billion being reallocated are coming mainly from the Special Funds?.

You recall that these funds outside the budget now numbers 5 in all, with the creation of the Covid-19 Projects Development Fund (CPDF) and the Covid-19 Solidarity Fund; these special funds will be meeting expenditures of about Rs20 bn in 2010/21. The consolidated deficit of Govt for 2020-21, including the special funds and off-budget expenditures on capital projects, mainly Metro Express, totals Rs 71 bn, or over 15% of GDP. That’s your so-called “Balanced Budget”

3. Is the Rs 3 billion reallocated from the recurrent budget coming from the targeted 10 percent reduction in recurrent expenditure, excluding social benefits?

4. Unfortunately, your satisfaction on the inflation rate being in the range of 2.5 to 2.8%, which you find reasonable for a middle income economy, will be melting away very soon. The BoM’s Inflation Expectations Survey showed that some 67.5 per cent of respondents indicated that the change in the rupee exchange rate was the primary source of inflation in Mauritius. With the increasing possibility of an accelerated depreciation of the rupee, is it not likely that the 97.5 per cent of the respondents of the survey, who were anticipating the inflation rate to be 2.0 per cent and above, may revised their expectations significantly upwards ?

5. On the queries, in your press conference, about the management of our Rs 80 billion by the MIC, which you successfully diverted to the issue of the vulnerabilities of the corporate sector while scaring us with the possibility of a systemic failure of the banking system, we wish to take it up again before our Rs 80 billion evaporates into thin air without leaving a trace. It's all a question of transparency and accountability about the investments and returns. We are forwarding you a request from the concerned citizens of Mauritius to review the governance structure of the MIC and equip it with professionals to ensure that we optimize the returns for the present and future generation.

15Harish Chundunsing, Raj Ramlugun and 13 others

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