The Comptroller and Auditor General (CAG) report on Goa's financial condition presents a broad outlook of the state's economic future and emphasises serious weaknesses that require prompt action. While there are some encouraging signs, such as revenue surpluses in specific years and consistent growth in Gross State Domestic Product (GSDP), the prevailing situation highlights fiscal instability resulting from high debt levels and rising expenditure obligations.
A primary issue is the violation of the debt-GSDP ratio target of 25 per cent throughout all five years from 2019 to 2024. The report indicates that, by the end of March 2024, the state’s total outstanding debt reached Rs 33,573 crore, leading to a debt-to-GSDP ratio of almost 30 per cent. Even though this ratio fell below 30 per cent in 2023-24, it still significantly exceeds the required 25 per cent threshold. This continual overextension suggests that Goa’s debt burden is unreasonably high in comparison to its economic output, reflecting a state of financial instability that restricts fiscal manoeuvrability.
The consequences are alarming, as a high debt-to-GSDP ratio limits the government’s capacity to respond to unanticipated financial crises, constraining the ability to make policy adjustments or invest in infrastructure. Contrary to the optimism expressed by Chief Minister Pramod Sawant during his address in the Legislative Assembly, the CAG report highlights a dangerous dependence on borrowing, which could increase interest repayment obligations.
On a brighter note, the report acknowledges that Goa succeeded in recording revenue surpluses in three out of five years, peaking at Rs 2,400 crore in 2022-23. The fiscal deficit remained within acceptable limits, as stated by the Chief Minister, indicating financial prudence. Furthermore, the 62 per cent growth in revenue receipts over five years, along with an 11.49 per cent rise in own tax revenue for 2023-24, implies that the government has effectively mobilised resources.
However, this growth has failed to keep up with the rising costs. Total expenditure increased from Rs 18,313 crore in 2022-23 to Rs 20,423 crore in 2023-24, marking an 11.52 per cent rise. Notably, revenue expenditure, which includes salaries, pensions, and interest payments, consumed a significant portion of the budget. Between 2019-20 and 2023-24, revenue expenditure grew from Rs 11,622 crore to Rs 16,849 crore, with committed expenditure (interest, salaries, pensions) constituting nearly half of revenue expenditure. The growth of committed expenditure, from Rs 5,725 crore to Rs 8,257 crore, emphasises the increasing financial commitments that have limited flexibility.
At the same time, capital expenditure, vital for infrastructure development, has doubled from Rs 1,660 crore to Rs 3,571 crore during this period. While this reflects a commitment to infrastructure, the overall spending pattern indicates that a substantial share of resources continues to be consumed by ongoing obligations rather than investments. Although the fiscal deficit has remained within designated limits, it has risen from Rs 1,994 crore in 2019-20 to Rs 2,148 crore in 2023-24. This increase, combined with elevated debt levels, demonstrates an unsustainable trend where borrowing and spending are growing faster than revenue, jeopardising future fiscal stability.
The CAG report reveals the necessity to adjust fiscal policies. The ongoing breaches of debt targets and increasing committed expenditures threaten to diminish fiscal latitude. To achieve sustainable development, the state must maintain cautious borrowing, control spending on non-essential items, and improve revenue generation capabilities. Enhancing fiscal discipline is crucial to preventing the debt burden from escalating and to protecting the state’s economic prospects in the face of emerging challenges.
