Budget 2023-24 proposes no new taxes. As he wound up his Budget speech, Chief Minister Pramod Sawant said he ‘will ensure that no effort will be spared to augment revenues to the government without burdening the common citizen even in 2023-24.’ The common man can smile that he won’t be paying more for what he purchases. The Chief Minister’s ‘even in 2023-24’ is pertinent as this is the second Budget in which there is no new tax that has been proposed.
Last year, presenting the Budget for 2022-23, Sawant had said, ‘In this year, I do not propose to levy any additional taxes on our Goans but I will work thoroughly to get in more reforms in various revenue generating departments.’ One of the areas which Sawant had outlined to increase revenue during the year was plugging revenue leakages.
His speech this year claims success in this. ‘Due to strict enforcement and measures adopted by me to plug revenue leakages as assured in the last budget, I can proudly say that the major revenue generating departments such as Commercial Taxes, Excise and Registration have shown a steep increase in revenue collections. They have already surpassed the projected estimates in 2022-23. Further, the majority of other departments have achieved more than 90% of the projected receipts,’ Sawant said.
Yet, there are no figures to be able to point exactly how much of the leakage has been plugged and such revenue that would otherwise have been lost has been accrued to the exchequer. Neither the Economic Survey nor the Action Taken Report on the past Budget make any reference to the plugging of revenue leakages. Even a close scrutiny of the two documents shows no head for revenue generated by plugging leakages.
However, it is true that the State’s own tax revenue which was revised to Rs 5720.75 crore is estimated to be Rs 6241.16 crore in the current financial year, and shows a growth rate of 9.09 per cent. When compared to the previous year, when the growth rate had been 5.97 per cent, there is indeed an increase. If this growth rate is due to the government plugging revenue leakages, then it is indeed commendable.
Early in his speech, Sawant had already made a reference to this, when he had said that ‘due to various financial reforms undertaken during my tenure, we have ended with revenue surplus of Rs 59.39 crores as against projections of Rs 58.46 crores in FY 2021-22 despite the COVID-19 pandemic disrupting the economy’.
So while no new taxes is a relief to the people, the burden could come in other forms. There were no new taxes last year, but inflation kept its upward curve and it was hardly surprising that the government had to borrow from the open market in the form of sale of bonds to the tune of Rs 1300 crore adding to the debt figure, which the Economic Survey tabled on the eve of the budget pegged at Rs 21,940.46 crore.
As Chief Minister Pramod Sawant finished his 2023-24 budget speech in the Legislative Assembly it was clear that debt was going to continue rising. Early in his speech he said, ‘Due to discontinuation of GST compensation, the State will see a revenue deficit of approximately Rs 800 crore through grants from Central Government. This void will be majorly filled by revenue collection from the initiatives taken by my government for restarting of mining activities in the State and increase in share of Goa in central taxes.’
Ironically, the revenue loss due to the stoppage of one source is to be met by the resumption of another source that had earlier been stopped. Yet, can mining operations restart early enough to make pay-outs to the government in the form of revenue? There are too many variables associated with the restart of mining, majorly the various permissions and clearances that the successful bidder has to obtain. It places a question mark on whether the mining firms will be able to deliver to the government in the coming financial year.
In a budget that had some innovative announcements, the claimed success in plugging leakages could initiate a new source of revenue generation, but only if the strict measures adopted in the current financial year are not relaxed.
