News on Sunday

Supplementary Appropriation Bill: MauBank costs government Rs 1.4 billion

Pravind Jugnauth made his first speech in parliament on Tuesday 31 May after he won his appeal case in appeal in the MedPoint case. He was presenting the Supplementary Appropriation (2015-2016) Bill at a second reading as the new Minister of Finance. Taking the floor, the Finance Minister explained that the Bill provides for the appropriation of an additional sum of Rs 4.1 billion in respect of services of government for the current fiscal year 2015-2016. Regarding supplementary expenditure incurred during the six-month budget period January 2015 to June 2015, the Minister stated: “I will come forward with a Supplementary Appropriation Bill and an Estimates of Supplementary Expenditure (ESE) before 30 June 2016.” Four main items were included in the supplementary appropriation:
  • Rs 1.4 billion for the 2016 PRB Report from 1 January to 30 June 2016.
  • Rs 1 billion for the payment of Rs 250 raise in the Basic Retirement Pension.
  • Rs 1.6 billion in MauBank
  • Rs 100 million for the Municipal Council Elections in June 2015.
Regarding the additional funding required, the finance minister stated: “We are confident that we would be able to contain government expenditure within the aggregate authorised limit of  Rs 92 billion as we would be having under-spending and savings” under other items of expenditure. Opposition MP Reza Uteem complained that government is asking the House to vote expenditures that are outside the Budget. He showed concern that the national debt level might reach 65% of GDP. Regarding MauBank, the MP claimed that “it is not giving expected results” despite government injecting Rs 1.6 billion as capital. The bank, he added, is not providing financial support to SMEs. The massive bank loans granted to fallen businessman Rakesh Gooljaury were also highlighted by MP Uteem. Former finance minister Vishnu Lutchmeenaraidoo – who is now at foreign affairs – explained that by creating MauBank, 750 jobs were saved along with the money invested by 640,000 clients. MauBank is already the country’s third biggest bank according to him. Labour Party parliamentary leader Shakeel Mohamed stated that when Bramer Bank was being closed down, the government promised that no public funds will be injected while it is the contrary today. For the leader of the opposition Paul Bérenger, Maubank’s method of competing is unfair towards other commercial banks.
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