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- Govt needs to control non-essential expenditure to improve fiscal health
Govt needs to control non-essential expenditure to improve fiscal health
With state budget round the corner and mining dipping to its lowest ebb, revenue source will be a major concern for Goa. GST state share could be one of the major sources but Goa government needs to have a re-look, map and review avenues. Nearly 40 per cent of the revenue earned is spent on salaries, pensions of government employees, leave alone the interests on borrowings. VIKANT SAHAY finds out from the recent CAG report where government can manoeuvre to boost its financial health
With state budget looming and the biggest revenue earner the mining sector dwindling, it is time for the State government to have a re-look at the most recent CAG Report and mend financial hygiene and cut down on government expenses. About 38 per cent of the government revenue earned goes on either salary or pension of the 50,000 odd government employees and ex-employees in one of the smallest state in the country which has a population of about 1.5 million.
Comptroller and Auditor General in its most recent report (for the year ended 2016) reveals figures about the State’s fiscal conditions and other expenditures incurred by Goa. In a scathing attack the report refers that despite having political stability in the previous regime, the government could not stem wasteful expenditure. Fiscal Deficit increased from Rs 948 crore in 2014-15 to Rs 1,483 crore in 2015-16. CAG highlighted several key parameters where Goa’s performance was not satisfactory and thus indicating that the previous regime’s inability in managing the state fiscal issues.
Due to increase in the fiscal deficit by 56.43% and interest payment by 6.64%, the primary deficit increased to Rs 408 crore in 2015-16 from a primary surplus of Rs 60 crore in 2014-15.
“During 2015–16, revenue surplus was Rs 132 crore less than the previous year’s surplus of Rs 279 crore due to reduced growth of receipts as compared to the expenditure,” mentioned the CAG report and added that the fiscal position of the state had declined in terms of key parameters as compared to the previous year. The parameters like revenue, fiscal and primary deficits indicate the extent of overall fiscal imbalance in the finances of the state government during the specified period.
President of Goa Chambers of Commerce and Industries (GCCI), Sandip Bhandare said, “primarily we also feel that diversion from the target will lead to fiscal mismanagement and even the state needs to be prudently managed. However, special needs of the society may lead to fiscal deficit too as the time period which the report mentions is a period where mining had totally collapsed and the source of revenue for the state of Goa got choked and these three years became critical. At the same time the needs of the Goans have actually increased. It is truly a difficult situation to manage. Even though Goa has been regular in paying interest to the borrowings, the borrowings need to be cut down. Encouragement of private sector can take care of job creation and overdependence on government for jobs.”
President of Goa Management Association, Nitin Kunkoleinker is of the view that for last fifteen years this topic has been discussed continuously. He added that a review of all the government employees through the help of artificial intelligence and information technology is required to gauge their output. “There has to be equal and strategic distribution of work, with accountability, task within a specific time frame for all government employees. Training of government employees is absolutely essential for enhancing their productivity. A complete mapping with sectoral approach of all the government employees needs to be done as government spends nearly 38 per cent of its revenue earned on them as their salaries, perks and pensions,” added Mr Kunkoleinker.
Damodar Kochkar, President, Verna Industries Association believes that the reasons for deficit are mining cases, violations of the mining plan and environment clearances to illegal extraction of iron ore, urban local bodies leased out without proper renewing agreements, rent recovered at low rates, etc.
He suggests that regular internal Audit is a must for mines. Appeal to the concerned authorities for coordination and cooperation in the mining activities in order to implement and enforcement the rules and mines Act along with strict action and enforcement on illegal extraction of iron ore is required.
“As regards urban local bodies leased out without proper renewing agreements rent recovered at low rates needs to be amended in the Act. All the council's should be informed to renew the agreement as per directives of the Director of Municipal Administration and not obeying orders should be penalised by not providing government grants. Also actions on the concerned authorities for not obeying orders issued by the superior should be complied with. This will help to increase revenues of the concerned council and also the government by way of stamp duties,” said Mr Kochkar.
He further added that all the social authorities be made enforcement of road tax for any type of vehicle and the schools receiving grants from the government must be verified in detail which will help to boost the revenue of the govt and reduce misuse of tax exemptions.