For the first time in the government?s history, the performance of ministries and para-statal bodies (see inset) will be given particular attention. It?s been a long time since the Finance minister, Rama Sithanen, announced his intention of implementing a system to make the public sector more efficient but his budget has finally made it a reality. Less waste and more efficiency seem to be the keywords of his ?reform? of the public sector.

For this year ?we have identified a total of 96 programmes across government and the staffing information is now provided by ministry and by programme as an indicative basis for the MTEF period (2007/2008 ? 2009/2010) in line with the recommendations made through the activities of the Public Service Reform (PSR),? says minister Sithanen.

Instead of a mechanical budget grant provided by the minister of Finance every year, the new system ?clearly links the funds appropriated by the National assembly to outputs ? goods and services produced by Government ? and outcomes ? changes observed by citizens in their life, over time, from the supply of these goods and services?.

The budget presented last week by Rama Sithanen is not yet the programme-based budgeting he intends to apply fully next year. ?However, this year, we have extended the Medium Term Expenditure Framework (MTEF) to the whole budget. We are providing an indicative MTEF budget for the period 2007/2008 to 2009/2010 that sets the stage for a full movement to programme-based budgeting in 2008/2009.?

For economist Pierre Dinan, this constitutes a ?major reform in the system, as it will allow better control of public expenses and a bigger chance of achieving value for money?. Hence, the Finance minister expects public debt and excessive budget deficits to be reduced to the benefit of development and expansion of social services. ?We have reduced public debt from 71% of GDP in 2005/2006 to below 66% of GDP in 2006/07. However, it still remains too high to give us the manoeuvring room we seek to support the restructuring of the economy while widening the circle of opportunities.?

In fact, the system appears similar to the performance indicators that have been implemented in the private sector. The ministry that asks for a sum of money for a specific programme will have a number of objectives to achieve. ?These objectives will be clearly set and quantified,? Pierre Dinan points out. ?And if the results are not achieved, then the ministry or department concerned will have to explain why.?

With this in mind, the programme-based budget is expected not only to develop a 3new mindset? but also to ?provide more concrete information on performance for decision-making purposes and setting future priorities and targets as well as to provide information for reallocation of resources between programmes and their activities? among other objectives.

NEW EXIGENCIES

<B>Parastatal bodies will also have to be careful</B>

?We must align the management of our parastatal bodies with our policy to eliminate waste in government, to focus on outputs and outcomes rather than on inputs and bring them in line with the new exigencies of our economy and society,? said Rama Sithanen in his budget presentation. This is why the government set up key performance indicators including general indicators for all para-statals on financial performance. He also intends to eliminate monopolies through liberalisation to increase competition. Likewise, he made it clear: ?Government will support rationalisations and mergers and ensure that all resources of para-statals are productively employed.?