According to the World Bank’s ‘Ease of Doing Business Survey 2015’, Goa is ranked 19th amongst Indian States. This is also acting as a deterrent to investments in the State. Due to the suspension of mining activity in Goa in September 2012, the State finances are facing tremendous crunch. Having considered the financial strain that the government has been facing, the industry too has not pressed for any major relief.
Industry is the largest contributor of tax and non-tax revenue to the State. However, every time a budget is announced there is hardly any allocation for improvement of industry related infrastructure or incentives. For example in the 2015-16 Budget, out of about Rs 2190 crore on social and other infrastructure, only Rs 16 crore was related to industry (for augmenting water supply to Verna / Sancoale Industrial Estate).
In order to encourage manufacturing and to generate employment in Goa, the Government had formulated an incentive scheme known as Goa Value Added Tax Deferement cum Net Present Value (scheme). The scheme allowed the dealers to pay 25% of the VAT/CST collected and retain the balance 75% with itself. The retention was allowed to boost the profit margin of the dealers. From time to time the scheme was extended. The last such extension was given on June 26, 2014. At present, there are substantial number of units for which the benefit of the scheme has expired on June 25, 2015.
Tourism also is a major contributor to the state economy. The industry feels that the State government can surely provide better facilities to both foreign as well as domestic tourists.
The industry in its pre-budget memorandum to the government, has requested to provide for investments in family entertainment infrastructure, better garbage management, need for an international standard convention center etc. The newly pepped up information and technology sector is expecting enough budgetary support to create infrastructure and plug and play type facilities for attracting good IT companies into Goa. Similarly, agriculture sector, fisheries, solar energy, horticulture and floriculture are the areas where Goa has been traditionally strong and these sectors need special attention.
Given the current depressed market conditions and considering that there is no other tax benefit available to the manufacturing units in the State, the Goan units are finding it difficult to compete with their counterparts in the rest of the country.
In industry there is already a feeling that the Government is not sensitive to its demands and that without any sense of priorities, is indulging in unnecessary capital expenditure, spending funds in broadening and cementing the existing roads, constructing bridges and highways without people’s demand. The balancing act at this time of revenue crisis after the big fish (mining) is out of the revenue pond, needs to be done with utmost care and sensitivity so that the failure in a mining sector does not fall as a sledge hammer on other sectors of
the industry.
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Narayan R Bandekar, President GCCI and industrialist
Requested government to waive or lower various licence/registration fees, cesses, charges etc in the mining sector
Manufacturing sector needs to be encouraged by giving certain tax concessions and also by making available better infrastructure like good roads and regular and adequate power and water supply
Requested government to provide for investments in family entertainment infrastructure, better garbage management etc. Goa is becoming increasingly popular as a conference/event destination, hence a convention centre of international standards is required
Hopes that the government gives enough budgetary support to create infrastructure and plug and play type facilities for attracting good IT companies in Goa
Hopes Goa government also takes steps to encourage youth to take to agriculture in a big way
ANIL COUNTO, Chairman of Alcon Group, industrialist
Special thrust on developing Goa as an ‘education hub’ is required and also, to manage the ‘drop outs’ which is rising at an alarming rate
Developing Goa as an education hub can itself bring in huge revenue as research centers can flourish
Thrust on agriculture, fisheries, horticulture, floriculture, solar energy and tourism is essential for social upliftment of Goans
Now that the ban on mining has been lifted, the govt must ensure that all efforts are made to bring on track the biggest earner of Goa’s revenue
Goa is an unpolished diamond and we have to ensure that the areas which require attention, must be attended to
Nitin Kunkolienker, Vice President, MAIT, industrialist
In automobile sector, Goa can be the first State to pass on the 50% Central excise tax rebate on scrapping 15 year old vehicles on to consumers to make purchase of new vehicles cheaper. Also, help improve environment
Education sector needs a complete overhaul as the system is running in archaich laws and methods. It needs restructuring as it cannot work in todays scenario. The governance of education sector needs to improve
Health is another sector which requires immediate attention and use the infrastructure which is already avialbale. Many of the new opertation theatres (at least three) in Goa Medical College have been constructed but it is not functional
Kirit Maganlal, Founder and
CEO, Magsons
Should amend Shop and Establishment act
Should allow retail outlets to operate 24×7
Remove excise for outlets selling liquor on national highways
Mini abattoir for small animals
Jervis Pereira, Director, Gitic
Increase grant for start-ups from Rs 2 lakh to Rs 10 lakh at low interest
IT park for start-ups
Parag Joshi, Former Chairman, CII
Remove Cess of 2% on manufacturers of plastic
Improve liquidity crunch
Luke Sequeira, co-founder, Fleetrover
Make it easier for strat-ups to set up operations
Make process more transparent
Manguirish Pai Raikar, Past President, GCCI
North south corridor
Promote Goa as tourist destination
Garbage disposal facilities
Vikram Verlekar, gold smith
Eco tourism should to be promoted intensively
Confidence should be taken of various mining stake holders and mining activities should be started immediately
Skill development and job oriented education
River navigation in Goa to be given top priority
Proposed projects like South Goa hospital, Mopa airport etc to be given priority
Mini Industrial Estate to be created for young entrepreneur and start-ups
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Francisco Braganza, President, TTAG
n TAXATION: The Tourism Industry cannot afford any increase in any taxation (Luxury tax, VAT on F&B, VAT on liquor, or any other local tax or fee). The concessions in luxury tax for the off-season in needs to be extended throughout the year, if not maintained at the same level.
n MARKETING EXPENDITURE: Needs to be rationalized. See that expenditure is result oriented and measurable in terms of increase in number of foreign tourist. There is need to divert the marketing expenditure from road shows and marketing to markets which are not Goa centric into incentives per passenger to foreign tour operators who actually bring foreign tourist
n EXCISE LICENSE FEES: Need to be stabilized and the unusual increase in the last year’s budget as regards license fees, more specifically relating to (B) category hotels needs to be reversed and rectified.
n THE TOURISM MASTER PLAN: Budgetary provision needs to be made for funding the completion of the Tourism Master Plan. No investment in tourism infrastructure should be allowed until and unless the Tourism Master Plan is completed. Much of this expenditure in the previous years has been unplanned and used for works that ought to be undertaken by the PWD or local Panchayats.
n WIDENING THE NET FOR TAX COLLECTION: There are more that 3000 to 5000 unregistered illegal hotels in Goa that do not pay any taxes. There are thousands of illegal restaurants that do not pay taxes at all. There are hundreds of illegal shacks that have no excise license and operate without any regard to authority. There are legal shacks which take a beer license and serve hard alcoholic beverages. They need to be brought within the tax net and increase the revenue of the exchequer so that law abiding and legitimate businesses are not over burdened.
n TOURISM BOARD: Like in many competing tourism destination, we need a Tourism Board or something similar in order to make the industry participate in any marketing exercise. It will reduce government expenditure in marketing as in such a case the trade may contribute in terms of man power, travel cost etc along with the Government.
n HERITAGE AND ART TOURISM Restoration of old heritage homes which are more than 75 years should be encouraged by giving incentive to start hotels/accommodation, art galleries and providing local tax holidays for five years. Subsidies for such development as most of the owners of such houses have no financial capacity to upgrade their products. Low interest borrowing should be allowed through EDC or such other Governmental organisations. Central Government had a similar scheme earlier which has lapsed.
n POLLUTION CONTROL: Goa State Pollution Control board fees need to be rationalized and should be fixed for eg, pollution created based on hotel operation by a particular hotel and not as per balance sheet. By the present system of charging fee an eco-resort which has higher turnover lands up paying higher fees, because of its turnover. Those having solar energy, no boiler and resorts adopting eco friendly methods in their operations should be exempted from fees or should be charged lower fees.
n INFRASTRUCTURE TAX: Hospitality industry to be charged infrastructure tax just like any other industry, which attracts lower taxation. Hospitality is declared as an industry in Goa and there is no reason why it should not be considered as an industry for infrastructure tax.
n PROMOTION: Charters are given incentives and brochures and marketing support is offered by destinations worldwide by those countries competing with Goa. We need to allocate a separate fund in this budget for this purpose which will increase the dormant figure of 0.5 million foreign visitors into Goa, to 1milliion visitors.
n VINTAGE CAR & BIKE MUSEUM: Provision be made in the budget for setting up a Vintage car and bike Museum in Merces, Panjim in the existing Government land earlier acquired by the Government for a different purpose and is presently lying vacant as the original idea of an amphitheater has been dropped. The TTAG will co-operate by providing inventory or in any other mode, the Government may suggest. Vintage cars and bikes are available in Goa in huge numbers. Ahmedabad has done one state of the art museum of this kind and is part of the tourism circuit.
