The headlines in the biggest National Daily one COVID-July morning last year read…“COVID-19: Goa’s economy may be worst hit, likely to contract 14.3% in FY ’21”! I perhaps overlooked a Benjamin Disraeli in the late 1879… and he had said… “What we anticipate seldom occurs; what we least expected generally happens.”!
We actually grew by a small 2.5%! So spake the Financials of Goa! A real pleasant surprise, given that the Indian Economy itself contracted by around 7.7%.
My Takes:
Before I come to my remarks on the budget itself, I would like to make three quick structural points:
1. I miss a page on quantified impacts of COVID-19, in terms of losses in revenues and on Economic Activities. Contrarily the mention is “impacts of COVID-19 on the State were much lesser than that in many other States’”. Rather odd, in this little State of ours, we’ve had 58,000 cases (nearly 4% of our population), against a national average of 1% and we had more than 820 deaths. I would have liked to see a statement, as an annexure showing Financial Impacts on Revenues, on Economic Activities, on Incremental Health-Infrastructure less amounts received out of the Rs 20 lakh crores, that were to come out from the centre’s “COVID-Package”!
2. But yes! so pleasing to eyes ..the “Green-Shoots”…a hostel for the migrant workmen who are rebuilding Goa, the Rs 1 crore for a Think-Tank here, the Rs 5 crores for a Heritage Plan there, are not the crores that matter to me ..it’s the “green-shoots” that are showing..
3. In financial crisis we are in, I miss information on the Mining Dues to be recovered by the Government – whether it’s Rs 35,000 crores or Rs 3,500 crores, the State (the ‘Survey says) has already spent 100 crores in 6 years in relief schemes for affected people.
The Economics: The fiscal deficit is high but within limits of the amendment of the FRBM last year to 5%. Goa at 5% (Gross Fiscal Deficit without debts) it has the highest GFD amongst states. Debts: GSDP ratio is on the increase and against our incremental debts of Rs 3,000 crores we expend nearly an equivalent amount in debt servicing (Repayments and interest together). Alarm bells – for a “debt-trap”! And the 15th Finance Commission allows not a rupee more. But it’s good to see a budgeted growth of 9.7% end-of-day!
My comments on eight specific lines are:
1.The first priority of Goa today is Employment and MSMEs (particularly the tourism industry). And unmistakeably it’s “Ease of Business” that’s important where we are at a miserable 24th out of 29 states. The proposals of certain taxes and cesses being automated is far less than what’s required. We urgently need industrial engineering to zero-base the numbers of government employees. Over the last five years processes have been automated, calling for review of our man numbers. Our Government Employees to Population is around 4% against India’s average of just 1%. Reskilling is the answer.
2. Tourism was hit black-and-blue by the pandemic and the hit promises to continue. I’m not sure which “Master Plan” is approved, one that I know of, was done by a Foreign Consultant in December 2018 which requires PPP investment where the Governments’ share is Rs 4,000 crores in 10 years. I don’t see the initial Rs 400 crores then. But what can you really achieve in the precious Rs 5 crores allocated? Another Rs 5 crores for home-stays, back-water tourism, “experiential tours” and heritage tourism, have so much of “green-shoots” value! Citizens look for a complete plan of costs, benefits and time-lines to understand! Interest subvention is welcome, but what’s the total amount we look at. Tourism is THE industry for Goa, its core competence. India had in 2019, 11 million foreign tourist arrivals. Of this Goa came tenth among all states, with not even a million. That’s the scope waiting for us.
3. My next agenda is GARBAGE and this is connected with the Sustainable Development Goals (SDG6) – Point 3 “Good Health and Well-Being”. Instead of concrete jungles of new buildings for state-administration, commercial taxes and district courts – lets first collect, carry, compact and recycle garbage.
4. My next item is Agriculture: It’s a good initiative, the GI tag. I note with disdain the degrowth in 2019-20 over 2017-18 by 1% in crops and 3% in fishing and aqua-culture, pre-COVID days. The increase in allocations is just 26 crores over last year. We need agriculture, horticulture, fruits and flowers for Swayampurna!
5. In Education – the Rs 25-crore allocation for Robotics and Coding learning and incubation is an excellent step, but we need clarity on the IIT at the earliest.
6. I’m a bit tired of the promises of resumption of mining. Now where exactly does this new Goa State Mining Corporation fit in? Is it going to bid and sub-contract, or do the mining itself on outsourced, model – what are the economics in any case?
7. On the Incomes side, I’m not clear why Central GST reduces 9%, where the Centre itself proposes increases of 23 % in its budget.
The Budget Speech of the 1st year of this Government in 2017-18 reflects nearly all of the major projects mentioned now, it promised to make “Goa completely self-sustainable and non-dependable for all agricultural products”, “Revamp the Entire Education System”, “A comprehensive Transport System” and lastly “Educational allocation (which then was at 3.6% of GSDP) would be hiked to 6%”; after 4 years it’s down to 3.05%!
And in conclusion:
“Swayampurna” is THE slogan for Goa, we must, to start with seriously revisit tourism, agriculture, education and SDG to start with. Let’s not leave anything to chance…as Disraeli would have loved us to.
(Binayak Datta is a Finance Professional)
