The report of the Comptroller and Auditor General of India (CAG) presented in the Legislative Assembly on Tuesday painted a bleak growth story of Goa. CAG reports are historically known to critically assess finances based on audits it conducts and suggest corrective measures. However, governments tend to see the figures in these reports as a smear on governance and pick up areas that suit their comfort.
The current CAG report has made some glaring observations in its audit report for the year ending March 31, 2021. 1. It has shown that the Gross Domestic Product growth rate has declined from 14.39 per cent in 2016-17 to 1.31 per cent in 2020-21. 2. The outstanding debt has shot higher than the 25 per cent limit of economic output. 3. The spike in borrowings in 2020-21 has led to a quantum jump in fiscal deficit from Rs 529 crore in 2019-20 to Rs 2,058 crore in 2020-21. 4. The off-budget borrowings have led to a sharp increase in the overall debt. 5. The maturity profile is alarming because within the next seven years, as on March 31, 2021, Goa will have to settle 49 per cent of its total public debt. 6. Loans increased drastically during the assessment period, while revenues showed an 8 per cent slump, with even the tax collections and central taxes showing a decline.
The positives are that the State’s growth rate during 2020-21 was higher than the national GDP. Industrial contribution to the economy of the State has increased by more than 4 per cent in the last five years even though the agriculture and services sectors showed a decline. The per capita income of Goa is far higher at Rs 5.23 lakh than the national average of Rs 1.45 lakh. Another positive is that the report showed an increase in population from 15 lakh in 2011 to 16 lakh in 2021. This is much against the theory of out-migration and the exodus of Goans leaving the State. Lastly, the fiscal deficit was contained below 3 per cent of GDP during 2016-20 and below 5 per cent in 2020-21.
The negatives far outweigh the positives in the report, throwing crucial questions on the financial health of the State. Goa has a mountain to climb if the government contemplates bridging the financial deficit. The argument that borrowings are well within the permissible limits is hollow against the figures projected by the CAG. Also, the GDP bettering the national average and positive industrial statistics is hardly a consolation.
The government understands the struggle over finances which has led to uncertainty in payments to some welfare and social schemes, besides the staggered salary bills of contract and temporary employees, leave alone the pension pay-outs. A rosy picture is painted from the outside, but Goa’s financial story stands in complete contrast.
In a grim situation, the government will have to consider ways to cut down on borrowings and spending while focusing on upscaling revenue. Signs of mining resumption in the next financial are too feeble to take comfort in, and tourism continues to be a major revenue contributor. Prudent fiscal management that includes drastic capital expenditure cuts and austerity measures should be the way forward. The CAG notings cannot be taken lightly.
