CA.ROHAN BHANDARE explains the Goa Budget for the year 2021 in a simplified dialogue format
A conversation between two gentlemen, A and B, over a bus ride. A sees B reading the newspaper article on the Goa State Budget
A: The Budget again? Didn’t we just have one in February?
B: Yes, that was the Union Budget 2021. This is about the Goa State Budget 2021 which was presented by Chief Minister Dr. Pramod Sawant on 24th March 2021.
A: Oh, could you give a quick summary? I am sure the pandemic has affected the numbers here as well.
B: Yes. The pandemic and the economic slowdown have posed severe fiscal challenges, and the lower revenue raising capacity and inherent difficulty in cutting expenditures has further piled up the borrowings. In exceptional times such as today, debt should not be a cause of concern as long a Government invests in quality productive expenditure, preferably in sectors having a greater multiplier effect. Given that the Government has had to hear so many pre-Budget representations from various associations and trade bodies to provide relief to the beaten down sectors, the Government has done fairly well to cover most of the sectors and provide some form of relief. With the Centre also providing relief through its Aatmanirbhar packages and centrally sponsored schemes, the State could also benefit in sharing the goodwill pie if the schemes could trickle down to the intended recipients.
A: And what are the important numbers that we should know about?
B: The Revenue Surplus for the financial year 2021-22 is Rs 58 crore. The gross budget size is estimated at Rs 25,058.65 crore, which is a 19% increase from the previous year. The Capital Expenditure is approx.
Rs 6,900 crore. The public debt is likely to increase further to Rs 17,962.24 crore as per 2021 estimates.
A: So the Budget is all about Incomes and Expenditures right, let’s start with the Income.
B: The revenue receipts are estimated to increase at 16.39% over last year. The State is banking on the support from the Central Government for grant aids and tax share. Just like the Union Budget, no major changes in the tax revenue streams have been proposed in the Budget.
A: Wait.. Why is there no increase in taxes like Luxury Tax, VAT and Entry Tax? The Government does need the additional money right?
B: Well, most State taxes such as Luxury Tax, Entry Tax and Goa VAT (other than Alcohol for Human Consumption and Petroleum products) have been subsumed with the advent of the Goods and Services Tax (GST) in 2017. This would mean the States would primarily have to depend on the centre for its share of the tax revenues. Individually, the States cannot toggle with the GST rates since they are determined by the GST Council. With the GST smartly plugging the tax loopholes and making its IT network robust, both the Centre and State expect better compliance and in consequence, a larger tax revenue.
A: Maybe the Government had an eye on the upcoming elections as well. What would be the major expenditure allocations? I heard the Budget speech is over 50 pages!
B: Sure, the theme of the Budget has been Swayampurna Goa. Using the letters S-W-A-Y-A-M-P-U-R-N-A, here is a quick mnemonic for you to remember certain important budgetary announcements:
S for Swastha
The pandemic has compelled the Centre and States to increase its allocation to the Health sector, and Goa has followed suit with a budget of Rs 1,719 crore, a hike of more than 19% from the previous year. Other announcements include the proposal to set up a medical college in South Goa district and the launch of ‘Health for All’ initiative for the overall health awareness among Goans, which would involve comprehensive health check-ups, as well.
W for Works
The expenditure in public works and infrastructure has the biggest multiplier effect for the economy. The Chief Minister has highlighted the various projects at the State and National level, which include national highways, water treatment plants and major road works to improve connectivity. The State would be using the new Goa Pragati Platform to monitor various developmental projects being undertaken in the State through various agencies. Other announcements include:
– Hot-mixing all the roads of the State lying in bad condition within the next four months.
– MLA local area development scheme to be introduced with a budgetary provision of Rs 100 crore for smooth execution of development works.
– Construction of the tallest state-of-the-art Administrative Complex Building at Patto at a cost of Rs 250 crore.
– An amount of Rs 450 crore has been allocated for the development works through GSIDC.
– Construction of Goa Bazar Project at Merces at an estimated total cost of Rs 53 crore, for allowing selling opportunities to Self Help Groups.
A for Academics
It is heartening to see that amidst the pandemic, the Chief Minister has given an allocation of Rs 3,038 Crore to the Education sector. The major announcements include the Rs 25 crore which has been allocated for the CM Coding and Robotics Scheme, DISHTAVO – a comprehensive and holistic programme setup to create e-content of syllabus of colleges affiliated to Goa University. The Government has also issued a letter of intent to three private universities and has accorded in principle approval to the International Law University sponsored by Bar Council and Western Region Campus of Forensic University.
Y for Yojna
Social Welfare is always a priority for any Government, and the pandemic makes it all the more imperative. An amount of Rs 350 crore has been allocated to the Dayanand Samajik Suraksha scheme. The Chief Minister has also proposed to revive the Goencho Dayaz Scheme for supporting traditional occupations such as coconut plucker, boatman, artisan, potter, coppersmith, salt extractor etc.
A for Agriculture
The Government’s proposal to consider GI-tagging to Goa’s indigenous products such as Mankurad Mango, Bebinca, Taleigao Brinjal, Coconut Feni, Kunbi Saree and Saat Shiro Bhendi are welcome. The Scheme of Fund for Regeneration of Traditional Industries (Sfruti) would be used to revive the traditional agricultural practices in Goa. The government has also proposed to establish 12 Farmer-Producers Organisations, one each in every taluka for crop production, post-harvest management and marketing of agriculture produce.
M for Mining
It wouldn’t be prudent to expect the Budget to provide a solution for the mining conundrum. As a step to restart mining operations, the Chief Minister has proposed the formation of Goa State Mining Corporation. The Government will also sign MoU with Mineral Exploration Corporation Ltd for carrying out mapping of mineral resources in Goa and identifying potential mining sites.
P for Paryatan (Tourism)
Tourism has been one of the severely impacted sectors by the pandemic and we hope that the vaccination drive acts as a catalyst to boost this sector. The Government has proposed the Tourism Trade Support Scheme, wherein B, C and D category hotels/ accommodations and travel and tour operators registered with Department of Tourism, will be provided with an Interest Subvention on Working Capital Loans upto Rs 25 lakhs. The Government will reduce the burden on chartered flights by bearing a part of parking and landing fees at Dabolim International Airport. Also, ‘Model Villages’ would be developed on unique themes such as tribal, agro, crafts, heritage and other such concepts, which would allow tourists to visit the offbeat locations in the State instead of concentrating only on the coastal belt.
U for Udhyog (Industry)
The Chief Minister highlighted the major ease of doing business initiatives taken by the Government, which include electronic ‘Self Certification Scheme’ and increasing the threshold limits of number of workers for applicability of the Factories Act. An amount of Rs 10 crores has also been allocated for the development of industrial infrastructure. However, the Budget could have achieved much more in this sector by showcasing the investment opportunities in Goa and synergising them with the measures provided by the Centre’s ‘Aatmanirbhar Bharat’ to improve its low Ease of Doing Business ranking.
R for Real Estate
To provide relief to the real estate sector, the rate of Infrastructure Tax would be reduced by 30% for a period of 6 months from April 1. The incidence of double-taxation in Stamp Duty and Registration Fees would also be streamlined. For low risk projects, the empanelment of Notary Architects and Notary Engineers for third party certification will be considered valid by TCP for issuing of Technical Clearance and completion orders.
N for Naukri (Employment) and Industry Skills
The Chief Minister has announced that 11,000 jobs are ready in the Government sector with around 37,000 jobs expected to be generated through projects cleared by the Investment Promotion Board. To make the youth industry-ready, the Chief Minister has proposed to introduce skill-based courses for employment in shipbuilding industry. The Chief Minister’s Rojgar Yojana for engineering professionals has also been introduced to provide hands-on experience to young Diploma/Degree engineers in executing small works.
A for Alcohol and Excise
A new Feni Policy would be notified soon to provide long term vision and due recognition to Goa’s heritage drink. In excise related provisions, all existing licensees will be allowed to obtain additional licences on the same premises. Casinos licensed by Home Department as well as all Class-A category hotels would be allowed to service liquor on their premises 24×7 with additional fees.
A: These are quite significant announcements. Do you feel the budgetary proposals could be implemented soon or are the numbers playing to the gallery?
B: Well, that’s the Rs 25,058.65 crore question! The deviations between the budgeted estimates, revised estimates and actual numbers should certainly be analysed. The Chief Minister has explained that the Government has the scope to implement these proposals by December 2021, since the State may undergo Assembly Elections by early next year. We also need to keep in mind that like a game of snakes and ladders, the uncertainty of Covid-19 could disrupt our forecasts and bring us back to square one.
A: Here’s hoping for a speedy execution of the proposals. Thanks for the information. Anyway, this is my stop. Am off to take my COVID-19 Vaccine today
B: That’s fantastic. Just like the vaccination drive, the Central and State benefits could be the two shots to jump start our economy. The benefits from the Centre are already underway. Here’s hoping the benefits from the State are implemented as soon as possible to get the maximum efficacy