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recourse to such an expedient I should regard a levy of 20 per cent. on all salaries as a heavy burden to place on the Civil Service. In such an event, however, I think that it might fairly be demanded that the present levy on salaries should be increased by 5 per cent. on each of the present grades, i.c., that the levy should be 15 per cent., 12 per cent., 10 per cent., and 7 per cent. according to grade. I hope it may not be considered necessary in any event to go beyond this. The total yield of such a levy would be about Rs. 685,000 as compared with a levy of Rs. 700,000 proposed by the members for Port Louis based on a scale starting from 20 per cent. If this became necessary, I do not think it would be practicable to maintain any longer the exemption of pensions from the levy, and would suggest in that case that they should be subject to a graduated levy of 10 per cent. to 2 per cent.
that
13. I sincerely trust, however, that it may not be necessary to proceed to such extremes and that in the course of the next few weeks there may be some prospect of an improvement in the trade outlook as a result of Budget concessions in England. In that case I feel confident that the proceeds of the forthcoming sugar crop, though somewhat diminished from the very promising results in view before the recent cyclone, would be sufficient to secure a balance of exports with imports and, in these circumstances, the present sources of revenue might be expected to yield the equivalent of the current year's estimate, which increasing depression has unfortunately made unrealizable. If a figure of Rs.13,700,000 were reached for revenue from current sources, the additional revenue to be derived from the taxation suggested in paragraph 10, viz., Rs.550,000 plus Rs.400,000 from the levy on salaries, and Rs.250,000 from interest on Hurricane Loan mortgages, should just suffice to balance the Budget. I think it would be reasonable however, in these circumstances, to increase the levy to suggested by the Financial Commission, i.e., a flat rate of 10 per cent., which would increase the yield by about Rs.150,000 if the lowest grade (i.e., salaries below Rs.780) were given some con- cession. The margin might also be further increased by some additions to stamp duties which are under examination at the moment. Although the contribution by the taxpayer to this result might seem inadequate, it must not be forgotten that additional taxation by way of customs and excise (on tobacco) has already been imposed, or is on the point of being imposed, which is calculated to involve an additional charge of Rs.900,000, viz., Rs.400,000 by way of Customs duties and some Rs.500,000 from the tobacco excise, while it is proposed to raise, if possible, Rs.100,000 by an excise tax on wines, making in all Rs.1,000,000 raised from the Customs and Excise. If in addition another Rs.1,100,000 were raised by taxation and levy on salaries, I think it should be recognized that the burden imposed, though certainly not ideally distributed, would still be considerable.
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14. A further condition made by the Members of Council is that the Government should refrain from further retrenchment by way of dismissals of staff. It is naturally a most distressing task to be obliged in a period of acute depression to add to the problem of unemployment and the prevalence of poverty by discharge of Government employees, and I sympathize with the Members in Nevertheless, the alternative policy their feeling on this point. suggested implies that the burden on the general body of Govern- ment employees who number over 5,000 should be increased to a formidable extent in order to secure the continued employment of some 300 of their colleagues whose services are not actually required for administrative efficiency. The full programme of retrenchment proposed by the Commission is, as I have already stated, in my opinion impracticable to put into effect at once, not on account of the distress and unemployment which it would cause, but because of the disorganization of the adininistrative services which I think would follow. But in spite of the hardship caused to employees, I feel that those retrenchments which are practicable and which, in some cases, make for increased efficiency should be put into force. As stated in my telegram No. 63, the total effect of these is roughly estimated at about Rs. 400,000, divided as
follows:-
Excise and Revenue Departments Law and Justice
Public Works Department (net) Forests
RB.
75,000
26,250
65,000
150,000
Rs.316,250
some
with the addition of economies in the Education Department and Fisheries Branch already in effect amounting to Rs.90,000. I feel The that these retrenchments should be pressed as necessary. personnel involved is about 100, the other 200 of the 300 mentioned above as within the programme of retrenchment being employees of the Railway.
15. In the above calculations, the Railway has been left out of account except in so far as provision is included for a deficit on working of Rs.233,000. The provisional estimates for 1932-33 submitted by the General Manager provide for a working expendi- ture of Rs.1,569,000 and a revenue of Rs.1,615,000, the latter being based on a sugar crop of 230,000 tons. The estimates for the current year were Revenue Rs.1,692,000, Expenditure Rs.2,256,459. The anticipated deficit of Rs.233,000 in next year's figures covers pensions, gratuities, and passages but no provision for depreciation or renewals has been included. This, of course, could not be a permanent arrangement, but is unavoidable at the moment suggested by the Financial Commission on page 142 of their Report,
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