Rohan Bhandare decodes Goa Budget 2025, highlighting a strategic leap towards industrial resurgence, tourism advancement, and sustainable growth
While the existing tax revenues and grants offer substantial assistance, the state was in need of a strategic push to accelerate progress and achieve the next milestone in its growth ambitions.
The Goa State Budget 2025 presented by Chief Minister Dr Pramod Sawant reflects this enterprising spirit with its grand welcome to industries investing in Goa, coupled with a strong emphasis on tourism, and generating employment opportunities.
Trade and Industry
Back in the day, the income tax and sales tax incentives for new industries were the catalyst in Goa’s growth story. During the Goa VAT era, the NPV Scheme revitalized the industry and stimulated economic activity. The new proposals in the current Budget have the potential to be game-changers yet again, wherein industries investing over `5,000 crore in Goa will receive a full State GST reimbursement for the first five years, a 50% waiver on stamp duty, and subsidies on essential services. Although the detailed provisions of the policy are yet to be disclosed, lowering the thresholds to allow more investors to qualify, phasing of the investments over a specified period and accounting for the prolonged gestation period required for establishing industries when determining the timeline of benefits would be advantageous. The success of the policy will not only give rise to new ancillary industries and generate employment, but also showcase Goa as frontrunners in the recently announced Investment Friendliness Index by the Centre.
Building on the commitments made in the previous Budget, the Goa Budget 2025 has unveiled eight new schemes under the Logistics and Warehousing Policy, aimed at reducing the financial burden and upgrading the existing infrastructure. For the MSME Sector, the Budget has introduced the ‘Unified Digital Portal,’ envisioned as a one-stop solution to streamline business operations and will facilitate the establishment of Business Facilitation Centres and a Women Entrepreneurship Facilitation Cell.
The Budget has also introduced a Goa-specific job portal to prioritise local talent and allow organizations across the state to list job vacancies, granting Goan candidates exclusive access to apply during the first seven days. The success of this initiative will largely rely on the robustness of technological infrastructure and the industry-ready local talent.
Tourism
To promote hinterland and medical tourism, a 50% rebate on State GST, exemption in stamp duty and registration and waiver in other processing charges have been announced for those who set up at least a three-star category or above hotel or hospital in the hinterland talukas. The announcement could synergise well with the Centre’s theme of promoting Heal in India and providing quality healthcare at affordable prices for international tourists. Infrastructure upgrades include a New Jetty Terminal, operational by June 2025, and a Mini Convention Centre, to be completed by December 2026. The proposal to register app-based aggregators to integrate Goa’s taxi services into a digital platform will simplify mobility and increase transparency. On the adventure front, aero-tourism initiatives at Quitla such as skydiving, powered paragliding and hot air ballooning will capture the thrill-seekers imagination. Other major proposals for developing caravan parks, a world-class cruise terminal, and introducing a plug and play model for large scale events promise to cater to a new vertical of tourists who spend more on experiences and recreational activities.
Real Estate
The lumpsum upfront payment of infrastructure tax was a major pain point for the real estate sector and the proposed two instalment facility of paying 50% at the time of obtaining technical clearance, and paying the balance 50% at the time of receiving occupancy certificate will definitely ease the financial crunch. The proposed amnesty scheme for the registration of transfer of immovable property without additional penalties is a commendable step and the drafting of the finer details will be crucial to make the scheme a success. Resolving the long-standing demand of the cascading double stamp duty issues could have made the proposals even sweeter for the real estate sector.
Information Technology
India has emerged as a leading destination for Global Capability Centres (GCCs) thanks to its highly skilled workforce and cost efficiency. The upcoming GCC in Goa is poised not only to boost the state’s GDP but also to position Goa as a prominent hub for global businesses. The proposed Centre of Excellence for advanced technologies such as Cyber Security, Cloud Computing, and Data Science is another good step towards fostering innovation and nurturing the youth for skill development. The Government has also planned to establish a state-of-the-art Data Centre through a Public-Private Partnership, enhancing secure data management and uninterrupted public services.
Skill Building
The Chief Minister’s vision for industrial growth is further reflected in the allocation of funds for skill development and innovation. The Chief Minister Fellowship Scheme seeks to nurture a research mindset among Goan students by providing a hands-on experience to work in the Research and Development divisions of multinational companies. Mandatory internships for students before graduation will ensure students gain practical experience and are prepared for real world challenges. To further support innovation and entrepreneurship, Skill Development, Incubation, and Startup Cells will be established in colleges, creating hubs for research and creativity. The Government has also launched an innovative ‘Skills on Wheels’ initiative, a mobile unit equipped with tools, technology, and educational materials to provide hands-on training, especially to the rural sector.
Clean and Green Initiatives
To enhance the competitiveness of Goan industries and minimize the cascading effect of taxes, the Government had reduced the VAT rate for Piped Natural Gas to 4% in the last year. Taking the next step toward fostering a gas-based economy, the Goa Budget has proposed granting new registrations exclusively to boilers operating on non-polluting fuels, alongside a phased transition plan for existing boilers.
The government has also been promoting renewable energy projects as part of its commitment to global sustainability goals. Among these is a `60crore pilot project for a ‘Model Solar Village,’ showcasing the potential of solar energy to electrify an entire village. Solar energy is also being integrated into healthcare facilities and major jetties. Additionally, 700 solar water pumps will be deployed with central assistance, extending the renewable energy footprint into agriculture. The government is also driving electric vehicle (EV) adoption with a ‘Subsidy for Purchase of EVs’ scheme and a 50% subsidy on the cost of high-tension electricity connections for charging stations.
On the infrastructure front, the Goa Sewerage Master Plan 2050 has been proposed to address the state’s sewage treatment needs for the next 25 years and improve sanitation infrastructure and reduce pollution.
Financial Insights
The Budget has grown to `28,162 crores, with a projected revenue surplus of `2,403 crores. The record-high Central Government assistance for capital investment, along with anticipated growth in mining revenues and tax collections, has enabled the Government to keep borrowings within the approved limits and restrict the fiscal deficit at `2,686 crore.
It is commendable that despite fiscal pressures, there are no new taxes or increase in additional taxes. Instead, the Government has prioritized curbing leakages, and the introduction of a hologram mark to track and trace the authenticity of liquor and single point taxation are steps in this direction.
With over `48 crore of pre-GST arrears waived in the last One Time Tax Settlement scheme, the Budget has announced an extension for the amnesty scheme to garner the locked-up revenue and provide a litigation free ease of doing business to the taxpayers. For the liquor industry, the removal of the annual opting in process for the composition scheme every year and the rationalization of tax slabs will ease compliance.
While the concept of a ‘Goa Happiness Index’ is under discussion, the Budget has already brought joy to several sectors. As with all budgets, the successful implementation of its proposals hinges on effective policy formulation, and the fine print will be critical in turning these ambitious initiatives into reality.
The writer is a Chartered Accountant, Chairman, Taxation Committee; and Hon. Treasurer of Goa Chamber of Commerce & Industry
