Tabled in the Assembly a day before the Budget was presented, it found little to fault the government with. This is what it had to say of the State’s economy, that the Gross State Domestic Product (GSDP) at constant (2011-12) prices for the year 2018-19 is estimated at above Rs 66,781.05 crore as against Rs 56,761.84 crore in the year 2017-18 thereby reflecting growth rate of 9.82% as against 11.08% in 2017 -18. It also says that the State has been revenue surplus from 2014-15 and this has increased since then. Those are figures and estimates that any government would be pleased to be able to bandy about. The fact that Goa has been borrowing quite big sums, doesn’t find mention, though it does admit that public debt is rising, but goes on to say that the debt/GSDP ratio is showing a decline.
Against this backdrop, Chief Minister Dr Pramod Sawant presented a revenue surplus Budget of Rs 353.62 crore, but fails to reveal exactly where the money will come from. This includes Rs 500 crore that is expected from mining. The government expects to earn from mining, but that will entirely depend on when the sector re-starts operations. As of now, the likelihood of mining getting back on track anytime in the foreseeable future is remote, and this was admitted in the State Assembly this week itself. The only new tax proposals, include enhancement of excise duty and fees that are expected to generate Rs 100 cr, and to increase conversion fees and rationalise the category of land on which it would be charged. Can this record a revenue increase for the government? Especially in a year when the State will host the National Games and bear added expenditure?
While the CM did assert that mining resumption, hinterland tourism and ease of doing business are going to be his priorities in the coming year, there, however, are a few admissions and new plans in the Budget. As suggested by Herald in this column earlier in the week, the State needs to look at other industries rather than mining and tourism, and that is what the Budget also did state. The Chief Minister in his budget speech did admit that the there has been tremendous pressure on the economy due to the closure of mining, and that the State needs to divert from the traditional mining and tourism for the future development of the State. Herald had also suggested that the State needs to explore the possibility of generating additional non-tax revenue, which was also included in the Budget.
In the same Budget speech, the Chief Minister also did state that there exists a financial crisis, when he stressed on continuing the infrastructure works despite this liability, and mentioned of Goa seeking a Rs 6,330 cr package before the 15th Finance Commission. It is clear that the State’s finances are not clear.
The State’s expenditure, however, needs to be streamlined. As per the Budget documents, 36 per cent of the total revenue of the government goes into salaries, pensions and other payments. This leaves just 28 per cent for development and infrastructure. Additionally, 12.7 per cent goes into debt servicing and 2.1 per cent into schemes. A rationalisation of the expenditure is definitely called for, especially since borrowings and loans account for 15.6 per cent of the income of the government. The State’s non-tax revenue accounts for just 13.2 per cent of the total earnings, while the State’s tax revenue stands at 37 per cent. The target has to be reducing borrowings, and also payments on salaries.
