Madam Speaker, as indicated in the ‘State of the Economy’ document which I laid on the Table of the National Assembly on 10 December, public sector gross debt stood at 559.1 billion rupees at the end of June 2024. This represents 83.4% of GDP. It has, of course, increased after that. This is well above the statutory debt ceiling of 80% of GDP, which the previous Government had itself set out in the Public Debt Management Act, which I must say itself is too high. 80% is too high. It used to be 60%, but nobody paid any attention to it. At the end

33 of 2014, when I left Government, it was actually 59.5% of GDP. So, they inherited a public debt situation which was fully sustainable, under 60%. And they have turned out to be one of the worst now in several decades. On the basis of the state of public finances inherited from the previous Government – • First, the borrowing requirements of Government during Financial Year 2024- 2025 is estimated to be around Rs59.6 billion compared to the Budget Estimates which was Rs38 billion, that is, it is higher by some Rs21.6 billion. • Second, for Financial Year 2024-2025, the interest payment on government debt is estimated to be Rs22 billion compared to the Budget Estimates, whereby they said it was going to be Rs20.1 billion, again, whereas capital repayment is estimated to be Rs40 billion. • Third, for Financial Year 2025-2026, on a no-policy change basis, preliminary indications are that interest payment and capital repayment will amount to Rs23.9 billion and Rs37.1 billion, respectively. As regards part (a) of the question, Madam Speaker, the reimbursement mechanism will again entail new borrowings by Government since it already has a very high level of deficit. We will come up with remedial policies in a Fiscal Consolidation Plan to bring public sector debt back to the sustainable level that the previous Government had inherited. We will aim to put it on a downward path. It is not going to be done overnight, obviously, but we want to bring it down to the level that it should have been: 60% of GDP. Concerning part (b) of the question, at this stage, no negotiations for an eventual Stand-by Agreement are being done with the IMF, but we are looking at all options.

Thank you, Prime Minister. Time is over for the moment! We will now move to Questions to Ministers. I am announcing that PQ I B/73 has been withdrawn. I think I have announced it already. PQs I B/54 and I B/59 have also been withdrawn. So, I will now call on the hon. Second Member for Rodrigues!

34 RODRIGUES – SANDALWOOD EXPORTATION – PHYTOSANITARY CERTIFICATE