On Friday, Chief Minister Laxmikant Parsekar sent out confusing signals. At a press conference he announced a scheme for Non Resident Indians which, no matter how well drafted, is nothing short of going out with a begging bowl. The idea behind the scheme is to get Indians settle abroad to virtually donate money with no prospect of earning any return. The scheme will be routed through the Commissioner of NRI Affairs while the projects will be implemented by the Goa State Infrastructure Development Corporation. The NRI who donates the money will have to be satisfied with his or her name on the project or on a plaque, hopefully made from high-quality marble. Ownership of the project will be vested in the government. The scheme is a desperate call for funds by a government that is fast running out of cash for development works.
On the same day Parsekar very boldly said the state government would take the recommendations of the Seventh Pay Commission in its stride. He said, "the government will rise up to the challenge of implementing higher salaries for employees." The government is yet to calculate the cost of implementing the recommendations, but with the chief minister already committing himself to implementing it, it would seem the cost hardly matters. All the schemes of the government are up and running and beneficiaries are receiving their payments, Parsekar claimed. He might be right, but the problem faced by the government pertains to development works which are getting stalled for shortage of funds. At present the government is heavily dependent on funds from the Centre to complete existing works. The contradiction here is if you have money to implement a pay hike, why are you going with a begging bowl to NRIs?
The position of the Centre is no different. It does not have an unlimited supply of cash to give to Goa, which is strapped for funds following the closure of the mines, three years ago. The economy has shrunk and so has the tax base and Parsekar now finds himself caught between the devil and the deep blue sea. He is dependent on the Centre, which will have to borrow an additional Rs 1 lakh crore to implement recommendations of the Seventh Pay Commission. This is likely to play havoc with the deficit, which instead of being contained at 3.5 per cent of the GDP, is now likely to go beyond that figure. The RBI has already sounded the bugle of caution. It has surmised that infusion of such a large amount of cash into the system will fuel inflation and when states follow, the situation will get worse.
For Parsekar, the situation is even more acute because of the 2017 elections which are fast approaching. He has to find the money to implement the recommendations and if he doesn't, he will gift the opposition with a readymade issue. No chief minister would want to antagonise government employees who number over 50,000.
With mining yet to begin in right earnest and with a Supreme Court case hanging over it like the sword of Damocles, economic growth is in jeopardy. The government is presently banking on the tourism sector to pull it out of the black hole that it seems to be sinking in and now it has appealed to NRI to bale it out. Will NRIs with spare cash oblige Parsekar?
