Note ban: Goa staring at revenue loss of Rs 786 crore

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RAMNATH N PAI RAIKAR | Assistant Editor

PANAJI : If the prediction of the state government turns out to be right then Goa, this fiscal year, could lose its annual revenue by a minimum of Rs 786 crore earned through value-added tax, excise duty as well as stamps and registration due to the impact of demonetisation of Rs 500 and Rs 1,000 currency notes.

A senior official of the state government informed ‘The Navhind Times’ that this year, the state government witnessed a smooth sailing during the period between April 1 and November 8 in terms of its revenue generated  from VAT, excise and stamp duty on property.

“However, post demonetisation, there has been a sudden drop in government earnings from these sources,” the senior government official added, predicting that the estimated low income during last five months of the fiscal year – November 2016 to March 2017 – could result in the state losing 20 per cent to 25 per cent of its projected revenue.

“If we are able to control the loss to below 10 per cent then it would be a big achievement,” he added.

As per the projected revenue from the three heads, the government should earn Rs 3,930 crore, during the financial year 2016-17. If a minimum of 20 per cent impact of the demonetisation is considered on this revenue, then the state could lose Rs 786 crore, resulting in only around Rs 3,144 going in the state exchequer.

It was further informed that the state government would be able to earn only Rs 400 crore during this fiscal year through the mining activity, as against the mining sector providing revenue between Rs 1,200 crore and Rs 1,500 crore during its peak period.

Admitting that the demonetisation is bound to affect the state revenue, Chief Minister Laxmikant Parsekar told this daily that he however, has not made any related correspondence with the central government seeking compensation for the same.

Incidentally, a number of states, sensing shortfall in their revenue, following demonetisation have already written letters to the Centre, urging the Union finance ministry to compensate these losses and increase funding to run their respective welfare schemes meant for the weaker sections.

Parsekar, who holds the finance portfolio, has already maintained that all the loans availed by his government are spent exclusively on developing the state infrastructure, while the revenue earned by his government through taxes is used to implement the social welfare schemes in the state. Furthermore, the state government will be implementing the Seventh Pay Commission for its employees soon, and the revised salaries would begin from January 1, 2017 onwards. With the implementation of the recommendations of the commission, the state government will have to bear additional burden of about Rs 44 crore a month on salaries and pensions, while the total liability on arrears would be about Rs 762 crore.

The Chief Minister said that in the event of many states communicating with the Centre as regards compensation towards their losses by way of demonetisation, the Union government is bound to formulate a related scheme.

“In such a case, Goa would also be benefitted from the same,” he noted.

As per the communication by the states like Andhra Pradesh and Telangana with the central government, they have estimated 30 per cent to 40 per cent loss in their revenue from major sources – excise, property registration and value added tax (sales tax) – due to the demonetisation.

States like Tamil Nadu, Uttar Pradesh, Bihar and West Bengal are also assessing the quantum of their revenue loss due to the demonetisation, while the Bharatiya Janata Party governments in Haryana, Madhya Pradesh and Jharkhand have reported fall in revenues by 20 per cent to 30 per cent. For most of these states, excise and VAT are the biggest grosser, contributing up to 80 per cent of their total revenue.

In conclusion, the state government official said  the second fortnight of December is an important period for the state tourism in terms of revenue generation.

“Now we have to watch for the number of tourists visiting Goa during these 15 days,” he added, predicting that the period between January and March could also witness drop in arrivals in Goa, especially since assembly election would be held in the state and visitors may not want to come here due to the same.