FRIDAY, APRIL 19, 2024
Alexandre Moniz Barbosa
There is absolutely no doubt that the economic situation in the State is extremely fragile, ready to crumble at any time. Borrowings are increasing and revenue sources have dried up in the past weeks, with only some semblance of normalcy occuring in recent weeks for the exchequer to earn. The Chief Minister has admitted that there is a ‘severe financial crisis’ and that there has been an 80 per cent drop in revenue in the financial year 2019-20. The State, Sawant said, “is going through severe financial crisis and it is not hidden from anyone. The revenue collection last financial year saw almost 80 percent drop. The GST and VAT collection affected badly.” Goa has also sold stock worth Rs 100 crore in the very second month of the current financial year. The State, the CM further said, is awaiting the special financial package announced by Prime Minister Narendra Modi for the nation’s economic revival, to revive its economy.
The political thinking in this regard is displaying signs of an abject lack of vision. The government, the opposition and industry are talking of financial packages to revive the economy affected by the COVID-19 lockdown. Here is what Chief Minister Dr Pramod Sawant said last week: “We have briefed Centre in detail about the financial position of the State and has also sought for financial package for revival.” And here’s what the Leader of the Opposition Digambar Kamat said: “I would like to bring to the notice of the Chief Minister that if this package of Rs 100 crore is immediately released in the local economy, the hardships of the Goans will be eased and the same money will be circulated back into the economy having its multiplier effects.”
It is not just the Chief Minister who admits to the precarious economic situation of the State or seeks a financial package. The Economic Revival Committee that the government constituted to suggest ways forward, says very early in its report that “it is now an accepted fact that the current situation due to COVID-19 is certainly a disaster of severe magnitude…” and seeks the the State request the Centre to direct the National Disaster Management Authority to direct RBI and banks to extend facilities/concessions to businesses in Goa that have been severely impacted by the disaster. On Friday, the Chief Minister met representatives of nationalised and private banks in Goa and urged banks to increase the credit limit for self help groups, to pitch in money in mining, tourism and industry for economic revival, to provide relaxation in loan payment to small businesses, especially those related to tourism for a period of three to six months.
The focus of the discussions between the CM and the banks was mining, tourism and industry, besides MSMEs. The Economic Revival Committee did stress on restarting of mining, which is said ‘was the most critical sector in the State and had created an excellent value chain as well as developed entrepreneurs in rural Goa. No other industry in the State has ever created such an impact on Goan entrepreneurship and it was one of the best examples of inclusive growth.’ It sought that the government move the Centre to amend The Goa Daman & Diu Mining Concession (Abolition and Declaration as Mining Leases) Act 1987, such that the date of grant of the lease for the mining concessions in Goa that were abolished is clearly clarified and be stated as coming into effect on May 23, 1987…’ This, the committee pointed out, will permit mining operations till 2037 and bring equality with the rest of India. This too the government has already pleaded before the Centre.
The report goes on to say that it is clear that industries will take at least six months, and tourism at least twelve months, to recover from the current impasse. This cannot be doubted and tourism in particular, could be the last of the business sectors to recover. Yet, that didn’t stop the State government from fancying giving this industry a new lease of life on an immediate basis. Soon after the video conference between the Prime Minister and State Chief Ministers, Goa CM Dr Pramod Sawant tweeted that he had suggested the restricted lifting of curbs in inter-State public transport and also put forth Goa’s perspective on the revival of the State’s economy including resumption of mining and tourism.
Mining has been on the government agenda for the past weeks, but this was the first time that the discussion on tourism in the midst of the lockdown emerged. It was certain the the Chief Minister meant business when he spoke of tourism, as later he told the media that the State will develop as Standard Operating Procedure (SOP) of its own for tourists visiting Goa. He repeated this the next day, but at the same time told people not to come to Goa for enjoyment. All that of course changed after the ten COVID-19 positive cases that sprung up in Goa of travellers entering the State.
It doesn’t look as though tourism will start anytime soon. It doesn’t also appear that mining operations will commence in the months ahead. What Goa therefore needs is some out of the box thinking where the economy is concerned, but that too has not been forthcoming.
To give it credit, the Economic Revival Committee dedicated a major portion of its report to agriculture and the rural economy. In recent weeks, reviving agriculture has been a topic that has surfaced in many conversations and in many of the demands and suggestions made in connection with the economy. Yet, these remain mere ideas that the government does not plant as seedlings to make them grow into produce. Frankly, while Goa’s was a highly agrarian economy just over even six decades ago, can we seriously consider agriculture as an alternative economic activity? Or will it be merely an activity that will support other stronger industries? It is imeprative that agriculture be revived in the State, but one has to be pragmatic as to its contribution to the economy. It would be nice to see the fields – those that still exist and have not sprouted concrete structures – to sway in shades of green this monsoon. But can and will that happen?
Neither tourism nor mining can give the State any real chance of earning immediate revenue. The only possible injection of revenue can come from an increase in the sale of white goods, which could happen if taxes are lowered. Due to the lockdown, people are not socialising so they are not spending. An incentive to purchase would be a manner of getting them to spend, and give the government some revenue. When the automobile industry was facing a downhill ride, Goa reduced tax by 50 per cent as an incentive to buyers. It led to an increase in sales. Can’t some such thinking happen at this crucial point of time?
