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No financial breakdown in state despite mining closure

PANAJI: Finance Secretary Daulat Hawaldar on Friday said that the government is not facing any financial breakdown in spite of the fact that exactly one year has passed since the closure of mining operations in Goa.

He also said that the market borrowings by the Goa government are taking place as per the approval of the government of India and the regulations of the Reserve Bank of India.

It may be recalled that the Supreme Court, in February 2018, had quashed the second renewal of 88 iron ore mining leases given to various mining companies in Goa, and stopped the mining activities in the state from March 15, 2019 onwards.

Speaking to ‘The Navhind Times,’ the Finance Secretary said that all the state governments go for market borrowings, every month, while the government of India does it on weekly basis. “There is nothing unusual in this, and it is a routine activity of the state,” he added, pointing out that the Ministry of Finance has set the borrowing ceiling for Goa, this financial year, at Rs 2,600 crore, while the state government has not even crossed the Rs 2,000 crore-mark.

Hawaldar also informed that some news reports as regards government having no money to disburse the monthly salaries of government employees are totally unfounded. “In fact, the salaries of the government employees for the month of March are never paid in March itself, but somewhere in the first week of April as the annual income tax needs to be paid in the month of March,” he clarified, noting that this trend is followed by all state governments.

Speaking further, the Finance Secretary said that there is a ten-year term available for the state government, for its market borrowings. “And those who respond to these market borrowings are not individuals, but nationalised banks and insurance companies,” he informed, pointing out that the interest rate for these market borrowings is concessional, and placed at around 8.2 per cent or so.

“And most importantly, the money which the state government raises through market borrowings, is not used for payment of salaries of the government staff, but for infrastructure development of the state,” Hawaldar mentioned, adding that this is normally the part of the fiscal deficit what we say.

“It’s a part of the fiscal deficit, which we raise through market borrowings and is approved in the budget as well as by the Ministry of Finance of the government of India, through the Reserve Bank of India,” he noted, observing that the Reserve Bank of India has total control over such borrowings.

Besides shutting down of the mining industry in Goa, the state is further facing a slump in its tourism industry, which in the past generated substantial revenue for the state government.

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