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Strategise to avoid debt trap: CAG advice to Goa

Panaji: The Comptroller and Auditor General (CAG) of India has advised the Goa government that it will have to work out a well-thought out borrowing-repayment strategy to avoid falling into a debt trap.

The CAG recommended to the state government that it may consider developing a debt sustainability framework for achieving an improved long-term sustainability in fiscal deficit management and to guide the borrowing decisions of the state in a way that matches its financing needs with current and prospective repayment of loans.

The CAG report for the year ended on March 31, 2018, which was tabled in the state assembly on Friday, stated that the maturity profile of the state debt indicates that the liability of the state to repay the debt during the periods of 2018-19, 2019 to 2021 and 2021 to 2023 would be Rs 888 crore, Rs 1,676 crore and Rs 2,126 crore, respectively, which may put a strain on the government budgets during that period.

Further, it stated that Rs 7,093.41 crore, that is 52.11 per cent of the total debt, would be repayable within the next seven years. Therefore, the CAG has advised that the state government will have to work out a well-thought out borrowing-repayment strategy to avoid falling into a debt trap. As per a table provided in the CAG report on servicing of public debt, the state government has done repayment of principal loan plus interest of Rs 6,606 crore from 2013-14 to 2017-2018. The table revealed that during 2013-14 to 2017-18, Goa government made repayment of principal loan of Rs 2,395 crore and interest payment of Rs 4,211 crore.

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