It’s no secret that Goa’s economy is in the grip of a slowdown. Even before the Supreme Court’s order which had cancelled 88 iron ore leases, the economy was facing the headwinds of slowdown. But, after the SC order, the slowdown is expected to get worse.
For evidence, consider the Economic Survey, which had pegged the GDP growth of Goa at a mere 8.9% in 2017-18 at current prices compared to 18.92% growth in the previous year, 2016-17. Bear in mind that this number of 8.9% has inflation built-in. If we remove the inflation rate, the growth, in real terms, would be lower in 2017-18.
After the implementation of GST, state’s commercial taxes kitty has struggled to grow, which again shows that the trade is not exactly growing in the state.
For a better ground-level reading, a trip to any market will suffice, where shopkeepers can be routinely seen struggling to get customers. Whether we look at macro-economic indicators or ground-level situation, it appears that the slowdown is imminent.
Experts have time and again pointed out that Goa’s huge reliance on mining and tourism is a cause of concern. While mining has hit a road-block, tourism is still growing. But here too, the state is getting far too many mass-segment tourists, who add little value to anyone. The question then is: Which is one sector that the state can depend upon?
Interestingly, apart from mining, tourism and pharmaceuticals, no other industry has reached critical mass in Goa. So, have we lost it all? Interestingly, there is a glimmer of hope.
As opposed any other state of India, Goa’s dependence on agriculture is very low. Apart from being low value add, agriculture as a sector, is resistant to change. In other words, Goa has one problem lesser than any other part of India.
As for pharmaceuticals and tourism, the demand largely comes from outside of India. Most pharmaceutical products manufactured in Goa are exported. And, tourism depends a lot on foreign travellers.
Simply put, the demand of two significant contributors to state’s economy “ pharmaceuticals and tourism - comes from outside the country. Therefore, Goa’s economic model is far more de-risked than most other states of India, which have to depend upon local demand.
Perhaps, it is time the state government gives a huge push to both pharmaceuticals and tourism industries. The focus has to be absolutely clear and spot on. Up until now, the state has not been aggressive in attracting any industry, whether it is manufacturing, IT or any other sector.
But, today, Goa is at a stage that it needs its policy-makers to re-look at the whole economic model. Or else, the problems are only going to get worse.
