State’s development roadmap is unclear owing to unrealistic revenue projections
Chief Minister Pramod Sawant has presented the budget for the financial year 2020-21 with a revenue surplus of Rs 353 crore. The total budgetary expenditure for the forthcoming financial year has been pegged at Rs 21,056 crore. The budgetary expenditure is about Rs 1,507 crore higher as compared to that of last year. Out of the total estimated expenditure, Rs 14,906 crore would be on revenue account, while expenditure on capital account would be Rs 5,069 crore. The growth rate of the state is put at 10 per cent. Revenue mobilisation is the key factor to attain budgeted targets. The government’s priority in the next financial year would be on resumption of mining, development of hinterland tourism, medical tourism, adventure tourism and eco-tourism and improvement in the ease of doing business.
However, no new major infrastructure projects have been announced in the state and it is apparent that the focus of the state would be on completing ongoing projects. As only 28.5 per cent of the total state receipts would be available for developmental works and maintenance of the existing infrastructure and for meeting committed expenditure on salaries, pension, grant in aid and debt servicing, it can be deduced that these two essential components of growth would take a significant toll. Although the government has announced its intention to develop Goa as a convention centre and education hub no fund allocation for the purpose has been made; so these projects, which entail major infrastructure costs, may have to be deferred. Without concrete proposals and fund allocation, other objectives such as tourism promotion in the hinterland, medical tourism and eco-tourism might also suffer for want of funds. The announcement of an apprentice scheme is a welcome step, but the government has to chart a new course to achieve this objective as the existing scheme failed to attract significant response from local youth. Though the Goa Human Resource Development Corporation has acquitted itself well in training manpower for government bodies it has to devise new measures to attract college students and graduates towards it apprenticeship programmes.
The gross state domestic product, estimated for 2019-20 at Rs 84,888 crore, and Goa’s per capita income at current prices at Rs 5 lakh – the highest in the country — are figures in which the government can legitimately take pride. However, the government has to borrow funds from various sources which indicates that all is not well with state finances. Owing to shortage of funds, which has stalled projects and compelled the government to borrow from the market, the government does not sound very convincing in its expectation of state growth at 10 per cent. The government would have to maximise revenue mobilisation and exercise fiscal prudence for generating more funds for stalled and new projects. The government has decided to establish an organisation called Goa Institute of Future Transformation (GIFT) on the lines of NITI Aayog to make a development roadmap for the state. We hope the government appoints economists and other specialists on the basis of merit and objectivity to GIFT and follows its recommendations.
The government has estimated a revenue of Rs 500 crore from mining. However, though the Supreme Court has allowed sale of extracted ore on which royalty has been paid, there are no signs of mining resuming in the near future. There is no roadmap for mining resumption. Even if the government were to get a go-ahead today it would take a long time for operations at the mines to restart. Under such circumstances, the estimated revenue from mining sounds imaginary. As far as revenue from liquor sales is concerned, the liquor lobby could force the government to roll back or bring down the increased levy as has been the case in previous years. The slump in the real estate market could deepen with increased levies. These and many other associated factors could deny the financial gains the government has projected using higher taxation. To sum up, the two major factors — the state government’s not-so-rosy financial situation tying its hands and the closure, slowdown or slump in various sectors of the economy — combined with the compulsion to keep up its welfare allocations make the budget projections unrealistic.