It is now clear that the BJP-MGP combine has failed to manage the finances of the State as borrowings have almost doubled from what they were in 2012, when this government took over from the Congress-NCP alliance. Chief Minister Laxmikant Parsekar’s predictions on tax collections and central funding have not only missed the target but have failed to even come close to it. Parsekar went horribly wrong with his budget estimates in the year 2015-16 as all his estimate of capital receipts seem to have failed and the result is that the State has to manage from borrowings from financial institutions, which have touched almost Rs 15,000 cr.
What has gone wrong for the Chief Minister is the lack of ideas to generate revenue. The ban on mining in 2012 meant that Goa would always be short of Rs 2000 cr, which came in through mining royalty and other taxes. Now, in 2016, four years since the ban, the government instead of harping on resumption of mining operations should have found other means to generate revenue. The government, be it Manohar Parrikar or Laxmikant Parsekar’s, has failed to generate revenue and relied instead on borrowings. Moreover, they have continued to undertake development works through Goa State Infrastructure Development Corporation and gone about announcing doles, which is costing the exchequer nearly Rs 3000 cr.
What is shocking is that in a bid to increase revenue, Parsekar, this year, announced that his government will levy a tax on hotel rooms even in the monsoon. One might well ask whether this government is on a suicide mission. It first killed mining due to lack of control and now appears bent on doing the same to tourism. Since the stoppage of mining operations, it has been tourism that has brought in revenue for the State. Despite a drop in foreign tourist arrivals, domestic tourists more than made up the number. The collection from direct or indirect taxes to the State’s kitty through tourism is approximately Rs 2500 cr. But this attitude of imposing more taxes will only kill the industry.
It is time the government considers announcing sops to tourism so that more tourists arrive. Does the CM foresee what could be the effect on Goa if the tourism industry collapses at this stage? Even if mining restarts, it is unlikely to bring the kind of revenue it did in the past as ore prices are at an all time low globally. The government, therefore, has to look for alternative revenue generation and cannot rely on mining alone. The Travel and Tourism Association of Goa (TTAG) was rightly upset with the CM’s announcement. The association said the announcement came despite their representation on the difficulties faced by the industry.
Even in election year, Parsekar has imposed more taxes, be it on petrol, hotel rooms, vehicles, liquor, etc.
Just how much can you tax the people? Despite these issues he has projected a surplus budget of Rs 158.82 crore. In the previous Budget, Parsekar had estimated additional resource mobilisation of tax and non-tax revenue of Rs 382 crore, which has gone into a Rs 1000 cr deficit. What went wrong was that Parsekar had expected a higher share from central taxes, which didn’t happen.
Figures reveal that the State’s tax revenue in 2011-12, before the BJP took over, was Rs 3231.60 cr and the non-tax revenue was Rs 2313.53 cr. But in 2012-13 after BJP came to power tax revenue increased to Rs 3716.87 cr but non-tax revenue fell drastically to Rs 1832.90 cr. Similarly, in 2013-14 the tax revenue increased to Rs 4431.00 cr, the non-tax revenue fell to a paltry Rs 1661.55 cr. In 2014-15 it showed an increase in tax revenue to Rs 4796.50 cr, the non-tax for the first time increased to Rs 2325 cr. The figures show that the government has taxed citizens heavily and failed to generate non-tax revenue.
