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PUBLIC RECORD OFFICE

Reference :-

11111 C.O.882/12

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| PUBLIC RECORD OFFICE, LONDON:

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Financial Commission did not deal with question of military contributions. The Elected Members of the Council approached me on subject before arrival of Financial Commission and I told them I was sure that question would be one of those which Financial Commission would examine. In view of this they did not press matter further but some reference to it should be made either in report of Commission or covering despatch or telegram. 1 have not again raised the question formally particularly in view of situation in United Kingdom as described in Circular despatch of 19th September* but the position remains as stated in my despatch of 20th January. +

C. 84574/31 [No. 48].

No. 39.

The Governor of Mauritius to the Secretary of State for the Colonies. (Received 7th December, 1931.)

(Confidential.)

SIR,

[Answered by No. 68.]

GOVERNMENT HOUSE,

MAURITIUS.

4th November, 1931.

As

In continuation of my Confidential despatch of the 26th October,! I have the honour to submit the following further observations on the reports which the Financial Commission on Mauritius will have submitted by the time this despatch reaches London. explained in my previous despatch the summary of the financial results of the report with which the Commissioners kindly fur- nished me before their departure would not have been intelligible unless it were read in conjunction with the report itself. As this document will now be available I may conveniently adopt the summary as a basis of comment and accordingly enclose a copy herewith.

2. It is pointed out in paragraphs 2 and 3 of the enclosure that the estimated budget deficit for the current year which, after allowing for the additional revenues anticipated from increased customs duties and tobacco excise, was calculated at Rs.235,000, may in fact be considerably exceeded. I am afraid there is now little

doubt that this will be the case.

The receipts for the first quarter

of the current year have been extremely disappointing as will be

*Not reprinted.

No. 25.

$ Cmd, 4034.

↑ No. 37.

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seen from the enclosed comparative return which, however, is not complete, as the accounts for the quarter have not yet been closed. In spite of increased import duties of Rs.2 per hectolitre on petrol and a ten per cent. surtax on other duties the receipts from import duties for the past three months of the financial year have been Rs.364,000 less than last year. The tobacco duties have fulfilled expectations and produced Rs.104,000 more than last year and the excise duties on rum show a slight improvement for the first time in some two years owing I think undoubtedly, to more active measures for the protection of excise revenue.

On the other hand other revenues have shown a decline, and in view of the overdraft in India established to finance the Currency Commissioners' funds the receipts from interest shown under Head VII, Item 2, of the estimates will not be realized. Harbour traffic is not likely to realize its full results owing to delay in commencing operations with the granary though there will no doubt be some corresponding saving on the expenditure side. The sugar crop will be shorter than anticipated and the amounts estimated under export duties will fall short of the figures shown. The sugar crop is late in handling and shipment and it is exceedingly difficult to say at this stage to what extent the effect of this delay on the first quarter's revenue may be made up in subsequent quarters. Assuming that there is some measure of recovery from this cause I am inclined to think the total deficit of revenue as compared with the estimate inay be from one million to one and a-half million rupees. This figure, however, assumes that the export duty on sugar which I do not expect to realize more than Rs.600,000 in view of the latest information as to the crop, will be retained by the Government. The Commissioners have proposed that this duty should be remitted, but that the money collected should be retained to make good arrears of revenue due to the Railway. I have already expressed my views on this proposal in paragraph 7 of my previous despatch and see no reason to modify them. It may, however, be pointed out here that if the proposal were adopted the resultant shortage in revenue to the Treasury should be reckoned not at Rs.200,000 as indicated in paragraphs 4 and 7 of the Commissioners' letter but at the full amount of the collections as the refunds of railway In my opinion, in arrears would be credited to railway revenue. view of the acute position of the Treasury, this tax should now be retained and allotted to its original purpose. This point will be referred to again in dealing with the question of the Railway. If this money is retained I hope that the shortage in estimated revenge may not exceed Rs.1,500,000, though in view of previous experience it must be admitted that it might even reach Rs.2,000,000.

3. On the other side of the account it appears from the report

of the Commission that the chief possibilities of substantial economy

in expenditure lie in a drastic reorganization of the system. I have on previous occasions expressed the view that this would be found

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