On January 30, 2019, the then ailing chief minister late Manohar Parrikar presented the financial statement for the State of Goa showing a revenue surplus of Rs 455 crore. While the late CM had painted a rosy picture of the State’s finances, the reality seems to be far more different. The State is on a borrowing spree so much that it is even struggling to pay salaries of its employees. SURAJ NANDREKAR takes a closer look at the financial condition and how the State is on the verge of going bust
While the Budget 2019-20 was projected to be a revenue surplus Budget, the figures say otherwise.
The two Chief Ministers, first late Manohar Parrikar and then Pramod Sawant announced that there would be a revenue surplus of Rs 455 crore.
In reality, the State had to borrow even to pay salaries. In 2019 (till December 2019), within 9 months the State borrowed Rs 2081 crore.
Shocking isn’t it? What is even more interesting is that this Rs 2081 crore loan is taken in just 9 months. This means the State has been borrowing over Rs 231 cr every month.
Another interesting point is that the State borrowed Rs 381 cr in one month of December.
The State’s debt at the end of March 31, 2019 was Rs 13937.37, which has now increased to Rs 16018.37.
Another interesting fact is that the State was permitted a borrowing limit of Rs 2081 by the Finance Ministry and guess what the State has borrowed all of that till December 2081.
As per the information, as on June 30, the market loan of Goa stood at Rs 11,410 crore, National Social Security Fund (NSSF) loan Rs 2296.75 crore while the Central loans stood at Rs1173.03crore.
Further, the government loan from National Bank For Agriculture and Rural Development (NBARD) stood at Rs 573.66 crore.
The government has also borrowed from the Life Insurance Cover (LIC), National Cooperative Development Corporation (NCDC), Housing and Urban Development Corporation (HUDC) and Power finance Corporation (PFC).
Ever increasing fiscal deficit
One important figure that raised several eyebrows is the sharp increase in the State’s fiscal deficit, which has shot up drastically to Rs 1,418.7 crore from Rs 763.7 crore.
26 p.c short of GST collection
While the Centre has been compensating the State for GST collection shortfall, the Centre will extend the olive branch only till 2021. Thereafter the State will have to make its own arrangements.
As per sources in the Finance department, currently the State has a shortfall of 26 p.c compared to the Value Added Tax (VAT) regime.
However, sources say there has been a small increase compared to the figures in 2018 of GST collection.
Consider these figures of State Goods and Services Taxes (SGST) and Integrated Goods and Services Taxes (IGST) collected by Goa.
From April 1, 2019-December 31, 2019 , the SGST collection was Rs 1106.05 crore, which was Rs 1008.32 crore from April 1, 2018 – December 31, 2018.
Similarly, the collection of IGST has increased to Rs 562.13 crore from April 1, 2019 – December 31, 2019, which was Rs 525.47 crore from April 1, 2018 – December 31, 2019.
As per sources, till September 2019 (April to September) Centre compensation was Rs 686 crore.
Where is the surplus?
As per the Chief Minister the revenue surplus is Rs 455 crore but if one calculates the figures provide by him reveals there is neither any surplus nor deficit.
As per CMs own estimates the State receipts include – Share in Central taxes (23 p.c), Grant in aid from Centre (9 p.c), Borrowings and other liabilities (17 p.c), States own non-tax revenue (13 p.c), and States own tax revenue (39 p.c).
The total rounds up to 101 p.c.
It is interesting to note here that the government is depending on borrowings and liabilities which amounts to 17 p.c as receipts. Further, the expenditure includes – Grant in aid and other transfers (13 p.c), Establishment (11 p.c), Debt Servicing (13 p.c), Investment, advances, contributions (11 p.c), Salary, Wages, pension and gratuity (24 p.c), Subsidies (2 p.c), Works maintenance and materials (27 p.c). This also rounds up to 101 p.c.
Consider, if the estimated receipts are Rs 101 and Expenditure is Rs 101, one fails to understand where the figure of 455 cr arrives from?
2019 was the third year in succession that the government has shown surplus revenue in 2017-18 it was Rs 510.62 cr, in 2018-19 – Rs 144.64 cr and now Rs 455.10 cr.
A Cabinet minister, who spoke to Herald on condition of anonymity, said, “If the revenue is surplus why are our works being blocked saying there is no money.”
“The Finance is playing all dirty tricks to stop development projects only because they have no money,” he added.
No scope for recruitment?
With the State intending to recruit another 5,000 plus staff to its already overloaded 60,000 plus government staff, it will exert extra stress on the State’s finances.
It is an open secret that the State is borrowing to pay salaries and pensions besides the contractors for development work.
As per sources in finance, the salaries and pensions form 70 p.c of the revenue expenditure besides 14 per cent goes for debt servicing.
Literally, the state has just 16 per cent of the budget left for development and administrative work.
BUDGET FIGURES FUDGED?
As per (late) Parrikar, the former CM, the total gross budgetary expenditure works out to Rs. 19548.69 crore, as against the budgetary estimate of Rs. 17123.28 crore for the year 2018-19, representing an increase of 14.16 %.
The same figures were cut and pasted by the new incumbent Pramod Sawant on
Out of this total estimated expenditure, Rs. 13308.26 crore, is towards Revenue Account and Rs. 4987.45 crore is towards Capital Account, the budget had estimated.
The gross estimated Receipts for the year 2019-20 was Rs. 16035.22 crore as against Rs. 13664.94 crore, estimated for the year 2018-19, showing an increase of 17.35%.
The State Own Tax Revenue, including the State share of central taxes is Rs. 9039.19 crores, as against Rs. 8257.25 crores, estimated last year. The estimated state share of central taxes for the year 2019-20 is Rs. 3336.47 crores as against Rs. 2979.00 crores budget estimate for the last year, representing an increase of 12%.
The Non-Tax Revenue was expected to be Rs. 3250.91 crores.
“Sir, this year too, I have maintained the legacy and I am happy to announce that this year a Revenue Surplus of Rs. 455.10 crores is estimated. Further, in order to discharge the responsibility on Government expenditure, including the on-going revenue and capital schemes,” Parrikar had said.
Situation well under control: Fin Secy
Despite the mounting debts and decreasing revenue, Finance Secretary Daulat Hawaldar says there is nothing to panic about.
Speaking to Herald on the State’s financial position after the Opposition’s tirade, Hawaldar said admitted that the debts are mounting but there is nothing much to worry about.
“Look, the loans are increasing but we are well within the limits given by the Centre. We have been paying salary on time and the debt servicing is being done on time. So what is there to worry about?” he asked.
Asked what efforts the State has taken to increase revenue, he said, “there are many efforts made but you know the mining closure has hit badly.”
Hopefully, he added, mining would resume and put the finance back on track.
Interestingly, the secretary agrees, there has to be curbs on expenditure like foreign tours, vehicle purchase etc.
“The focus in the next year has to be on control on revenue expenditure,” he says.
He also refuted reports that the government has not paid the contractors for development works.
“We have cleared most of the contractors last month. If there are some pending then it has to be due to some discrepancies in the bills,” he said.
On the fiscal deficit, the Finance secretary Daulat Hawaldar when contacted said that the figures are right.
“The fiscal deficit is within permissible limits, which is three per cent of the GDP,” he said.
