Focus on higher investments in sectors with high potential
The chairman of the 15th Finance Commission N K Singh lamented that though Goa has a huge potential in revenue generation, it has failed to exploit it. According to him, the state needs to take a combination of measures like increasing capital expenditure and eliminating transmission and distribution losses in the power sector and improving the quality of expenditure to generate future income to tackle the economic issues it was facing. There would be no disputing his view that agriculture was one of the key areas that had to be given better attention. Diversification was the key to economic progress. Tourism, one of the mainstays of the state’s economy, faces competition from other domestic and international destinations. Tourism has great scope for diversification and spurs growth in many areas. The state must fight the competition to get a higher share of the tourism pie. One of the ideas thrown up by the Finance Commission was to raise taxes on liquor to increase revenue. However, generation of more revenue should not dampen business growth. If that happens, the deceleration in business growth will neutralize the acceleration in revenue growth. The state government needs to take the criticism by the Finance Commission in a constructive spirit. The commission regretted that the state government had been irregular in the constitution of state finance commission and not implemented the recommendations of the two SFCs. At the same time, the Finance Commission appreciated Goa’s efficiency in utilising central funds allocated to it.
Goa has sought Rs 6,333 crore from the Centre, but it has refrained from seeking a special package despite huge adverse impact on its economy due to mining closure. The state wants to utilise the central funds mainly for promoting organic farming, tourism development and disaster management, besides other sectors. Having impressed the finance panel with its presentation for seeking funds, the state authorities should straightaway begin preparations for making the best utilisation of the funds. The state had a large migrant population. The state lacked a strategy to deal with a large floating population. The state has to formulate a robust skill development infrastructure for Goan youth to avail of and join the workforce at various levels. Migration of labour fills a gap which is there because local labour is not available. The state needs to make policies and implement programmes by which the gap is reduced to minimal. The state government should take the comments of the finance panel seriously and comply with its recommendations to put the state economy back on rail. A priority list should be drawn so that works on the plans can begin straightaway after receipt of funds. They should work overtime to comply with the request of the panel to provide it the data on total holiday time spent by tourists in the state. The authentic data could be crucial in allocation of funds for creation of the infrastructure needed for tourism development including that in the hinterland.
With the 15th Finance Commission stating that Goa is the jewel in India’s crown and that it wants the jewel to remain unblemished, it is for the state authorities to work hard to make Goa a shining example. The commission’s averment that fund allocation would not be dependent on the size of the state but its progressive nature should give the state government impetus for proper utilisation of central funds as well as of the revenue mobilisation by the state itself in order to hope for getting higher allocation. With no plans drawn yet for utilisation of funds promotion of organic farming it remains to be seen how the state would utilise the funds for them. Given the fact that the funds have to be utilised within a set time frame the state government needs to draw up plans speedily and ensure that the plans are implemented. It is clear from the findings and observations with respect to the evaluation of the 15th Finance Commission that the state must make a priority list of sectors and sub-sectors of the economy that it must focus on in order to attract investments or to scale up investments. More investments will mean more production, more employment, more tax revenue and more public and private spending to boost the economy further.