The author analyses the Chief Minister’s intent and promises, while explaining allocations to various verticals
The Chief Minister Dr. Pramod Sawant is always up to date with the latest trends. Not only did he use his popular catchphrases during his Budget speech, he has also outdone the ten minute food delivery trend with an equivalent two day express delivery of the State Budget 2022. While both food and budgets can be best judged after a short cooling period, the freshness, packaging, delivery time, and the unchanged taxes deserve kudos.
The Numbers
The Government is only playing the cards they are dealt. The pandemic and the slowdown have severely affected Goa’s economy with just a 1.6% growth in State Income in 2020-21.
The Gross Budget size has slighted dipped from the previous year to Rs 24,467 crores, of which Rs 17,097 crores is revenue expenditure while Rs 7,370 crores is capital expenditure. The budget estimates for the fiscal deficit for FY 22-23 stands at Rs 3,603 crores, which is an alarming 3.94% of the GDP. The GST compensation stream may soon taper off while the loan repayment obligations are rearing their heads.
With the trump cards of restarting mining and central support in taxes and grants up their sleeve, the government
has strongly projected a revenue surplus of Rs 434 crores.
Industry
Economic growth cannot only depend on government expenditure, and the Rs 3.75 crores for various initiatives under the Goa Investment Promotion and Facilitation Board will surely help in attracting private investments to Goa.
The Entrepreneurship Policy takes a leaf out of Swayampurna 2.0, while the job boost through the Electronics
Manufacturing Cluster at Tuem looks promising. Although the persisting land, energy and EODB matters would require more than a singular Budget remedy, it is laudable to see the formulation of the Logistics Policy to help consolidate this fragmented sector and increase trade competitiveness.
Infrastructure and Public Works
It is hard to overstate the centre’s contribution towards Goa’s infrastructure works. The plans and timelines for the Mopa Airport and its connectivity, the new Zuari Bridge, JICA projects and the revamped Captain of Ports are exciting. The allocation of Rs 80 crores earmarked to GTDC for tourism infrastructure development projects and Rs 372 crores to Goa Infrastructure Development Corporation will definitely have a multiplier effect on the economy. The one day a week earmarked to resolve water issue shows the Government’s
cognisance of the ground realities, but it may still be advisable to allocate more time at least in the initial weeks to
clear the piling grievances.
With the trump cards of restarting mining and central support in taxes and grants up their sleeve, the government has strongly projected a revenue surplus of Rs 434 crores
Education & Health
The Education and Health sectors have had significant allocations of Rs 3,850 crores and Rs 1970 crores respectively, an increase of 27% and 13% as compared to the previous year. The allocation to computer laboratories and sports facilities along with broadening the scope of coding and robotics is a crucial investment in the state’s future. The decision to open two Critical Care blocks at GMC and South District Hospital, Tertiary Cancer Care Centre and a new ESI Hospital will make healthcare more accessible and affordable. Mining The fact that the Government has staked its budgeted revenue surplus on the presumption that Rs 650 crores would be received from mining activities would suggest that the restart is on the horizon. There has been no further movement on the State Mining Corporation, but the implementation of the Mining Dump Policy and making the Goa Mineral Development Corporation operational could keep the momentum going.
Tourism
The tourism sector had initially been battered by the pandemic, and is now facing uncertainty due to international tensions. The marginal increase in allocation could have been improved, but the focus on eco-tourism in the interlands, beach safety, and development on heritage works and strengthening the Goa Tourism Board is the right step for the Chief Minister’s vision of making Goa the tourism capital of India.
Real Estate
The digitisation of the Building Plan Approval Management System and online issuance of Zoning and No Objection
Certificates will simplify and standardise processes. The Home Loan subvention scheme will also help to boost demand. Resolving the long standing demand of the cascading double taxation issues in stamp duty could have ade the proposals even sweeter for the real estate sector.
Taxes and Suggestions on Reforms
Given the current financial situation, it is reassuring to see that taxpayers would not be burdened with additional axes during these uncertain times. Instead, the Chief Minister has promised to focus on undertaking tax reforms, and has backed this with an increase in the estimates of the state’s own tax revenue. Here are a few suggestions on tax reforms, which could see an inflow of revenue:
a. Unlike other tax laws such as The Goods and Services Act and the Income Tax Act, wherein a GSTN or PAN obtained once will remain valid until the cancellation of the registration, the registration obtained under the Goa VAT Act, 2005 has to be renewed every three years. Doing way with a periodic renewal akin to many other states will ensure a wider tax base for Goa as well as an ease of lesser periodic compliances.
b. Taxpayers, especially in the tourism sector, could be given an option to prepay their annual tax/non-tax fees for a longer term of say 3 to 5 years at a subsidised rate. This will not only benefit the state exchequer, but will give tax certainty to businesses.
c. A good amount of state tax dues are locked up in litigation over the years. With GST turning five soon, it may be time for the state and businesses to stop looking back in the rearview mirror, and amicably settle their state tax disputes.
d. The recently announced Budgets of other states in India have seen a significant reduction (by upto 75%) in rates for cleaner fuels such as natural gas. Since these taxes currently burden the cost of the final produce from Goa, a similar proposition by the Government will make manufacturing in Goa competitive, and will in turn increase production levels and tax collections in Goa.
e. Leveraging technology will not only help the Government to nab the tax evaders, it will also ensure a level playing field for the organised players. There is enough data which can be made available by compiling information from various government agencies.
In fact, even a simple Google search for accommodation listings and their prices is enough data to extrapolate the registrations and tax revenues that Goa is losing!
The Entrepreneurship Policy takes a leaf out of Swayampurna 2.0, while the job boost through the Electronics Manufacturing Cluster at Tuem looks promising
The Road Ahead…
It is commendable that the Chief Minister has ensured allocations across the spectrum at a time when the expenditures are increasing in certainty and the incomes decreasingly so. With only 44% of the previous Budget provisions being fulfilled by December 2021, the current year budget implementation would be under even greater scrutiny. Even with a long five year innings to go, there is no doubt that the Chief Minister will yet again keep up with the trends and adopt the 20/20 style of implementing the Swayampurna 2.0
