Any Budget is essentially a balancing exercise, with the Finance minister having to accommodate demands from various lobbies, interest groups and stakeholders, within a tiny percentage of the resources in hand. We all eagerly look forward to see ‘what goes up’ and ‘what goes down’ in each Budget. But the tax proposals, which come at the end of the Budget speech, constitute only a minuscule percentage of the total outlay, most of which — regrettably — is more or less pre-assigned to various fixed commitments, the largest of which is maintenance of an overbloated bureaucracy.
In that sense, Goa Chief Minister Laxmikant Parsekar’s surprise ‘surplus’ Budget has sops and disappointments for nearly all sections, with few, if any, surprises. VAT hikes on petrol, liquor and an across-the-board increase in taxes for essential services have drawn criticism from Leader of the Opposition Pratapsingh Rane, who has predictably labeled it as ‘anti-poor’ (one cannot expect the Opposition to praise the Budget; it would be perceived as not doing its job).
Tax increases are inevitable in a situation where government revenues are badly down because of the stoppage in mining. Nobody should complain about the CM’s proposal to hike VAT on petroleum products from 10 to 15 percent. For, he has tempered this move with an assurance that petrol prices will not be allowed to rise above Rs 60. This keeps the prices of fuel lower than in any surrounding State, while bringing some much-needed revenue to a government that is facing such a severe cash crunch, that contractors of infrastructure projects across the state have stopped work on account of unpaid bills. The same applies to liquor. We can afford to pay more tax; booze in Goa is still much, much cheaper than in neighbouring states.
Take the positives: While the Budget size has increased by 26.48 per cent, from Rs 10,540 crore last year to Rs 13,331.44 crore, the Plan size has also increased by the same percentage, from Rs 4,985 crore last year to Rs 6,900 crore; providing more money for development projects. There is an estimated revenue surplus of Rs 408.18 crore, which is a considerable achievement in the background of revenue deficits ever since mining stopped.
However, Parsekar’s claim that the Budget focuses on employment generation for youth and infrastructure creation in the State (inspired by the vision of Prime Minister Narendra Modi’s ‘Make in India’ campaign and by Swami Vivekananda, in that order) needs to be taken with a largish pinch of salt, since his projection — of creating 50,000 jobs and investment of Rs 25,000 crore — has been conveniently made over the next five years, when his government has only around two years more in office. Similar is his improbable promise of 24×7 ‘high quality’ power supply, on the very day that Goa’s capital Panjim suffered a day-long electricity outage after high tension cables were damaged in careless road excavation operations.
Goa’s business stakeholders, though, have reacted optimistically. The tourism sector is especially upbeat with the 84 percent jump in tourism outlay, and the proposal to make meters compulsory for new taxis. Industry is pleased with the focus on construction of roads and new bridges, the proposed electronic manufacturing cluster at Tuem, IT park at Chimbel and creation of a new industrial estate at Latambarcem, along with the Rs 700-crore increase in allocation to the Goa State Infrastructure Development Corporation (GSIDC) and formation of an infrastructure fund. However, it finds the government’s ‘push to investment’ grossly inadequate, as its demands for extension of the Net Present Value (NPV) scheme, abolition of Entry Tax, freeing of SEZ land, and Task Force on Logistics didn’t find mention in the Budget.
But no one spoke up for the ‘aam admi’ in Goa, not even the local Aam Admi Party (AAP). Here, an area of deep concern is the State’s overall indebtedness. Loans and market borrowings are leading the State into a debt trap. Goa’s public debt rose from Rs 5,623.03 crore in 2009 to Rs 6,872.36 crore in 2012. And then again, to Rs 8,070.80 crore in 2013 and Rs 9,524.14 crore in 2015. The figures show that successive Congress and BJP governments have both enthusiastically borrowed left, right and centre, notwithstanding Governor Mridula Sinha’s Assembly speech pointing to the former as the culprit.
This means that each and every citizen of Goa has a debt of around Rs 60,000 on his or her head. Even more troubling is the fact that of the total borrowings, only 38.84 per cent constitute central loans (down from over 60 percent just a few years back), most of the rest being SLR-based market borrowings. Unless Narendra Modi’s central government comes up with the Rs15 lakh per head it promised from recovery of black money stashed abroad, every one of us, our children and grandchildren will have debts to pay, thanks to our profligate governments.
