Educating Wadan on the Budget

[posted 27Nov 2008, 1400]

There is no truth in Wadan Narsey's claim  that money allocated to the Health Ministry for the purchase of medicines was slashed to fund the extra budgetary military expenditure, says Mahendra Chaudhry.

The claim (FT 26/11/08) is not only incorrect but patently false. It appears to have been made to lend credibility to his fabricated lies about the 2008 Budget. The truth is that nothing was diverted from the Health Ministry’s budget.

There is also no truth in Dr Narsey’s claim that budgets since 2007 have been “presented without including the VAT on most items”. The fact is that VAT has been excluded from the salaries and wages component only of the budget, and rightly so, because, as we all should know, VAT is not payable on such items.

In the past VAT was erroneously included on salaries and wages thus artificially inflating the total government expenditure by a massive $75 million. This misrepresentation was corrected in 2007.

The additional military expenditure was funded from the overall savings achieved within the Budget and not by slashing funds from other allocations, as claimed by the Professor.

Dr. Narsey needs to understand that the over-expenditure by the RFMF was regularized in 2008 after the closure of the government’s 2007 accounts. There were sufficient savings within the Budget to absorb the excess expenditure by the military and the Health Ministry which were the only two entities which had over-run their budgets in 2007.