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- State budget fails to enthuse Goa Inc
State budget fails to enthuse Goa Inc
The State budget has been presented to a rather lukewarm response. Ajit John spoke to members of the business community as well as an economist who had much to say about the budget
The statement of account has been presented by the government of the day. A financial instrument that provides a window into the performance of the government and more importantly a vision statement for the forthcoming financial year. Every year the budget elicits reactions that vary depending on one’s political ideology or sense of kinship to the party that presented it.
The statement of accounts is a constitutional requirement. The economy of the State has not been as the cliché goes in the ‘pink’ of health. It has been a dull market that each and every businessman in the State has had to deal with. Poor sales and outstanding in the market have been the common chant in the market. What does this financial statement have to say about the economy?
Blaise Costabir, MD, GMI Zarhak Moulders Pvt Ltd felt it was a perfunctory exercise to meet the constitutional requirements. He felt there was no direction and all that investment promised for education meant nothing.
Costabir said “This was a statement of accounts and that was it. Nothing more nothing less. This is for five months.”
Sandip Bhandare, President, Goa Chamber of Commerce and Industry, said “Parrikar has sought only a Vote on Account to provide for the Government expenditure for next 5 months instead of presenting a full budget. Parrikar has always believed that top class infrastructure is the key to Goa’s long-term development and even during this vote on account his focus for infrastructure improvement is evident from the fact that Public Works, Water resources, electricity and other infrastructure has got almost 45% of total budgetary provisions of over Rs 13,000 crore. IT, education and health have also been top priorities for him and he is known for his innovative social welfare schemes. All these sectors have got substantially higher allocations. Further like the previous year, this year too he has presented a revenue surplus budget, the current year’s surplus being Rs 455.10 crore.”
Other businessmen in the State when contacted felt it was irrelevant given the fact there was no governance taking place and plans in the budget meant nothing. One of them who did not want to come on record felt the budget at the Centre would be far more important and everything essentially flowed from there.
However, economist Dr Manoj Kamat, PhD Finance- IIT Bombay, Post Doc Fellow (Economic Policy)had much to say about the policy. He claimed there were inaccuracies that riddled the document.
Dr Kamat said “Revenue receipts are expected to be Rs 12,19,378.79 lakh compared to figures budgeted last year at Rs 1053069.37 lakh. It is just not understood as to how all the figures (revenue as well as the expenditure) of the budget estimates for the year 2018-19 match exactly with the revised estimates for 2018-19? This is very ‘creative’.”
He said it is just not possible that the government claims to be so confident of being able to earn the exact revenue and spend exact money closest to the decimals of the exact paisa, as per the revised estimates for 2018-19 and those figures budgeted last year for 2018-19.
As per the document the govt expects a 10% increase in the GDP for the upcoming fiscal year 2019-20 by expecting 7% less borrowings and 4% less share of its own taxes in its pie of total revenue offsetting by the increase of State’s share in Central taxes by 10%. In terms of expenditure the government expects 4% increase in the salary and wage bill for the upcoming year in its total pie of rupee outgo. He hoped these numbers could be achieved.
Manoj felt it was heartening to learn from updated figures in the budget 2019-20 the government has surpassed its expected revenue surplus in the year 2017-18. The government had expected a surplus of Rs 30,905 lakh as per RE for 2017-18 which actually turned out to be Rs 51,062 lakh for the same year.
The govt, he claimed in 2018-19 expected a revenue surplus of Rs 14,464 lakh only as per the revised estimates, as against the actual surplus of Rs 51,062 lakh in 2017-18. This amounted to 3.5 times lower than the previous year due to an expectation of an unprecedented increase in revenue expenditure in 2018-19. However, what he could not understand was how the govt could expect a surplus of Rs 45,510 lakh (almost 3 times more) despite falling short of the same target by 32% in 2018-19 compared to the past in 2017-18. This calculated to an expected increase of 211% despite 32% shortfall in revenue surplus in as budgeted in 2018-19 compared to actual figures in 2017-18. This means the government expects the surplus in 2019-20 to increase unprecedentedly compared to what it expected in 2018-19 owing to expectation of increase in the revenue receipts in the upcoming year. This he felt made no sense.
The fiscal deficit for the year 2019-20 is expected to be Rs 1,41,865 lakh as per the new budget. Given that for the passing year the figure is expected to be Rs 76,367 lakh only, means the fiscal deficit for the current year is expected to rise by 85% (or 1.85 times) compared to the last year 2018-19. This he felt was not very good.
A long-timeobserver of State politics and business, he now prefers to sit on the side-lines and would like to stay anonymous. He said “Where is the politician with vision in the State. Not one of them has a vision beyond enriching themselves and staying in power. Anyhow we have a government for show.”