BDO : Rekindling the Traditional Sectors
Conscious that the traditional sectors namely Sugar, Tourism and Manufacturing have been experiencing precarious situation and difficulties, Hon. Pravind Kumar Jugnauth, has in his seventh budget and third in the capacity of Prime Minister and Minister of Finance earmarked several key measures and incentives to give a breathing space for the actors in those sectors to rekindle their businesses.
This fifth and last budget of this Government during its current mandate has as expected also brought many sweeteners to boost the general feel-good factor for the population by increasing their discretionary income either through tax relief on products such as fuel, diesel, gas and tax relief on income by adjusting upward threshold reliefs and allowances. The Prime Minister and Minister of Finance has continued in his stride to provide incentives to enhance the welfare system, improve women participation in the economy and strengthen support to the elderly. Hon. Pravind Kumar Jugnauth analyses the actual status and is pleased with the current reduction of unemployment level, stronger economic foundations, positive results in improving the income for the lower earners and pensioners, thereby narrowing the income between the poor and the rich whilst keeping inflation in control and having an annual average growth of 3.7 % which compares favourable to global forecast by IMF and the World Bank.
Based on this background, he sets his 2019 Budget program titled ‘Embracing a Brighter Future together as a Nation’ which is articulated around ten pillars covering the social, economic development, traditional sectors and new emerging sectors, Infrastructure and environmental safeguard, Health, Education and Safety, outer islands and management of macroeconomy.
The key popular measures will undoubtedly be the incentives provided to the cane planters, of whom many have abandoned their lands, with a guaranteed income and waiver on fertilizers, insurance and other cost. The tourism sector has also received attention in this budget through incentives for hotels, provision for Promotional Campaigns, development of infrastructure for cruises and rebates to promote MICE tourism. Promotion budget has been earmarked for the manufacturing sector together with several schemes for the Small and Medium Enterprises. The Government aims at a better Private and Public partnership through revisiting the PPP (Public Private Partnership) and the BOT (Build Operate and Transfer) framework.
Whilst the budget focusses on rekindling the traditional sectors, it does not lose sight of the need to embrace new sectors like the Ocean Economy, Information technology (Robotics, Artificial intelligence) and to consolidate performing traditional sector like the financial sector. Incentives for promoting our financial centre as a clean jurisdiction adhering to international norms and diversifying the products portfolio offered. Moreover, the proposed collaboration of the Mauritius Financial Centre and the Gujarat International finance Teccity is expected to provide more impetus to the growth of licensed funds in Mauritius.
A major part of the budget aims at the well-being of the population through Infrastructure development for many healthcare and Sports facilities in various regions and introduction of a medical scheme for the public sector and a housing scheme. The Government continues in the massive development of Infrastructure including roads, airports, warehouses and have also earmarked budget for the development of Rodrigues and Agalega.
One of the key incentives of putting people first has been to introduce a new Workers Rights Bills for improved labour mobility and the introduction of a new mechanism for the computation of Gratuity to recognise full length of service of workers. A portable gratuity fund would be set up in that respect. The Budget has also placed the Environmental protection, waste management and Green Energy high on the agenda.
The revised forecast budget deficit for fiscal year 2018-2019 is about RS. 15.9 Billion (3.2 % of GDP). Hon. Pravind Kumar Jugnauth sets out to maintain the same budget deficit of 3.2 % of GDP (RS16.9 Billion) with total revenue of Rs.121.7 Billion and total expenditures of Rs138.6 billion of which the capital expenditure is Rs. 17 billion. The country is thus set to achieve a GDP growth of 4.1% in 2020. Furthermore, the budget plans for early refund on Public Sector debt by using part of accumulated undistributed surplus held by the bank of Mauritius and thus bringing the Debt/ GDP ratio to 60% well before the initial target date of June 2021.
In summary the budget has focused on the social dimensions, employee protection and alleviating the hardship faced by the traditional sectors, the people and continued the development of the infrastructure whilst also addressing the environmental conditions. The budget also mentions on the new sectors of development such as the Ocean Economy and the innovative technology sector encompassing robotics and artificial intelligence.