In a small state like Goa where policy decisions are announced round the clock, the Budget exercise can only be a process of consolidation. And that is exactly what Chief Minister Laxmikant Parsekar sought out to accomplish. In that sense there are no surprises. There are no grandiose plans or tax announcements but careful tinkering where it is required, with concessions in one place and some squeezing in another.
One aspect that stands out on close reading of the Budget speech is the sleight of hand “ a noticeable attempt to hike up growth with clever manipulation of words and numbers. In 2012, when mining had stopped, growth slowed down to 4.17 per cent and picked up to 7.7 percent in 2013-14. In the new financial year the economy is expected to grow at the rate of 10 per cent, which is higher than the national average. This should have been good news, except that it has been calculated on the basis of current prices, which does not take the rate of inflation into account. The growth rate at constant prices would have given a clearer picture as to where the State was headed.
The State goes to the polls in a year and it is very obvious that this weighed heavily on the Chief Minister’s mind because he has allocated a whopping Rs 4008 crore for planned expenditure and this money is expected to go into creation of tangible assets which can be seen by people. Another Rs 934 crore has been set aside for social sector schemes, which puts money directly into people’s hands. This commitment will stretch the financial position of the state because the fiscal deficit stands at 2.84 per cent of GDP which is just within the 3 per cent permitted by the Goa FRBM Act. The debt ratio is 17.7 per cent of the GDP which is within the 25 per percent limit. The State has been borrowing heavily to fund infrastructure projects and social commitments and with inflation worked into the Budget figures, things could go horribly wrong if a check is not kept on expenditure.
The Chief Minister has placed added emphasis on the primary sector with an allocation of Rs 444 crore towards agriculture, animal husbandry and fisheries. Bulk of the outgo will be on schemes and incentives to boost the primary sector, especially agriculture and dairy farming. An attempt was made to blunt the coconut tree campaign by increasing the support price to Rs 10 per nut, formation of a coconut promotion board and making an NOC from the agriculture department mandatory for cutting a coconut tree.
It appears the Chief Minister paid heed to the demands of the mining industry which is struggling to get out of the starting blocks on account of low international prices. Parsekar set right an anomaly in the taxation structure by doing away with cess under the Goa Rural Improvement and Welfare Cess Act. The tourism industry was not so lucky, perhaps, because it is doing well. Hike in luxury tax and inclusion of budget hotels with rates above Rs 750 per night in the luxury tax bracket is not likely to go down well with the industry. But then, can one blame the Chief Minister for flowing the votes?
