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Mauritius Budget and Public Finance
Whereas successive governments have differed on
questions
such as social welfare spending, labor policy, and
privatization,
they have maintained remarkable unanimity in passing
budgets and
promulgating policies aimed at strengthening the national
economy. Faced with growing budget deficits in the late
1970s,
for example, Mauritius implemented a Structural Adjustment
Program in 1979-80 drawn up principally by the IMF and the
World
Bank. The program has been relatively successful; budget
deficits
fell from 12.6 percent of GDP in 1981-82 to below 2
percent of
GDP in the early 1990s. (Deficits during fiscal years
1988-89 and
1989-90 rose above 30 percent of GDP, however, in large
part
because of increases in government salaries.) In May 1991,
Mauritius paid all its debt to the IMF ahead of schedule,
a rare
accomplishment for a developing country.
Revenues during fiscal year 1991-92 amounted to MR10.9
million; government estimates showed 90 percent coming
from tax
revenues and 10 percent from non-tax revenues and grants.
Expenditures for the year amounted to MauR11.8 billion, of
which
MauR2.6 billion went to public debt service; MauR1 billion
to
social security; MauR1.5 billion to education, arts, and
culture;
and MauR778 million to health. (Country Profile 28)) In
1993 the
government was set to reform the tax system in order to
widen the
tax base and reduce evasion.
The budget for the fiscal year
(FY--see Glossary)
1994-95
came to MauR17.8 billion, of which MauR1.3 billion was
designated
for foreign and domestic debt repayment. Revenue was
estimated at
MauR15 billion, of which MauR2.7 billion came from direct
taxes,
MauR9.6 billion from indirect taxes, MauR1.5 billion or
2.2
percent of gross national product
(GNP--see Glossary) from
a
budget deficit, and the remainder from foreign support and
miscellaneous sources. The budget contained some new
provisions
to encourage investment and savings; it abolished foreign
currency controls and eliminated the tax on sugar
products.
Budgetary appropriations in 1994-95 included MauR2.4
billion for
education (almost double the 1991-92 amount), MauR208
million to
train middle management (compared with MauR90 million the
previous year), MauR138 million for industry, and MauR327
million
to build 2,000 houses for low-income families. The FY
1993-94
budget had stressed health, allocating MauR1.2 billion to
this
area and MauR552 million for road construction, as well as
appropriations for lengthening by 780 meters the runway at
Sir
Seewoosagur Rangoolam International Airport and providing
75,000
new telephone lines.
These budgetary appropriations fell within the broader
framework of the 1992-94 development plan, released in
April
1993. The plan emphasized the role of the private sector
and of
the free market as opposed to public sector bodies and
state
controls. The plan aimed at an overall annual growth rate
of 6
percent: 4.9 percent in agriculture, 10.5 percent in
construction, 7.7 percent in the EPZ, 6.5 percent in
financial
and business services, 9 percent in tourism, and 9.5
percent in
utilities (electricity, gas, and water). Specific plan
allocations were the following: agriculture MauR1.85
billion,
airport MauR1.28 billion, education MauR1.02 billion,
environment
MauR1.89 billion, health MauR602 million, housing MauR7.86
billion, industry MauR219 million, roads MauR1.39 billion,
Rodrigues and other islands MauR658 million, social
services
MauR124 million, telecommunications MauR866 million,
tourism
MauR257 million, water MauR951 million, and youth and
sports
MauR152 million.
Data as of August 1994
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