Chief Minister Pramod Sawant’s impromptu visit to Delhi to hold meetings with Central ministers followed by an extensive meeting with Finance Department back home reflects a sense of anxiety over the State’s finances. Sawant appreciated that all loans were restructured and brought to an average of 8 per cent interest cost while also announcing that the Small Industries Development Bank of India had in principle agreed to offer finance to the tune of Rs 1000 crore under the cluster development fund.
The finance department came in for praise from the CM for the financial management in tough situations. However, questions remain on why the State sourced finance through the Receivables Exchange of India Ltd (RXIL) platform even though payables are higher in terms of net percentage, and why the State sought another loan under Nabard. Also, there is no clarity on how the money was utilised. The math behind the restructuring of interest costs remains a suspect given the background that the market rate of interest has been around 8 per cent. Against the background of loans being taken, the huge delays in paying for social security schemes are questionable.
The CM may have tried to give an overview of measures taken to contain the cost of servicing debts, but the larger picture remains grim with revenue generation a major concern. Sawant had tabled the State Budget for 2022-23 last month-end with an outlay of Rs 24,467 crore and had raised hopes of generating Rs 650 crore through mining activities. He maintains that his government will take the auction route to resume mining in the State. If that is the case, and given the precarious financial background, why was the resumption of mining not expedited? Why is there no urgency to look at alternative streams of revenue instead of excessively relying on GST collections, tourism and central aid? Ironically, the ministers in the BJP government, who hailed Sawant’s budget as ‘progressive’ and were enthused by the numbers have already begun to feel restless with the shortage of funds and non-movement of their files.
Revenue generation, curtailing wasteful expenditure and judiciously using unused central funds are the three key areas that the CM has rightly emphasised. Given the situation at hand, sooner or later the government may have to deviate from its ‘please-all’ policy and take hard decisions, including tinkering with taxes. Goa will have to rethink some of its ambitious development plans besides keeping on hold promises of opening up jobs.
While revenue generation is critical to plans of the State, so are austerity measures. Sawant has made some outlandish proposals in his budget that are not realistic under the current situation. Even if the budget sops were for the sheer optics, the government will still have to cut down on wasteful spending. With coffers running dry, the new ministers who have promised a change will have to hold on to their horses and wait for sunny days ahead as Sawant does a tightrope walk.
