The CM of Goa Dr. Pramod Sawant presented the budget for the financial year 2022-23 recently. What follows is my assessment and comments on the same as a student of economics and citizen of Goa.
The budget proposed an outlay of Rs. 7.357 thousand crores as capital expenditure. For a perspective, this is not even 1% of the state GDP, while Central BJP government is spending upto 2.91% of GDP as capex. I think the financial constraints on the Goan Government is responsible for this.
The budget lacks any concrete steps for employment generation. In most places, the budget promises to support central government schemes in this regard without any clear fund allocation. There is a promise to set up MOOCs, which is a promising direction, but only following the trend.
Although BJP had made tall promises regarding restarting mining in Goa in its election manifesto, the budget makes no mention of the same. Even the most populist promise of three free cylinders did not see the rise of the day.
Mining and employment will share their budget allocation of Rs 340 crores with industries and IT.
Goa’s second important sector is tourism. There’s not much reforms to be done here, only hoping that the pandemic does not spoil the game this year again. However, even before the pandemic hit, the sector was not doing so well for itself. This badly demands some corrective action.
The budget has proposed framing an Eco tourism policy to promote hinterland tourism. It is a move in the right direction, but will take time to take shape and fructify. I must emphasize that I am no expert in this matter – but this is what my layman thinking puts forth: Eco-tourism cannot be done in a haphazard manner, Ecology cannot be strained with over-tourism, while beaches can be comparatively more accommodating in this aspect. Besides, Eco tourism has much less scope for splurging money – which means limited potential to create incomes. Therefore, although it is a welcome step in a right direction, when seen through the eyes of an economist, it is not very appealing.
One welcome step has been a 12.86% rise in allocation to the health department. Goa already has a commendable inflow of people from neighbouring areas in Maharashtra and Karnataka for medical treatment – even in face of strained facilities. If Goa sets up good health infrastructure, after serving its native population, it can be a great destination for medical tourism. The plan is already in motion, with large allocations to Goa Medical college and hospital (Rs 173 crores), and IPHB (Rs 53.82 crores) and Dental college (Rs 92 crores). Sources confirmed that even private hospitals in Goa are bracing themselves for medical tourism.
Fisheries have witnessed a sharp spike in allocation – by 72.41% over the last budget allocation. The government will set up 10 bio-floc units to promote inland aquaculture and fish-entrepreneurship.
About the new and renewable energy, with a total outlay of Rs 40 crores in this regard, the government appears to be testing the waters. Most of the outlay will go to subsidies for e-vehicles and solar rooftops. Exploratory steps are being taken in the area of hydro-electricity and bio-electricity generation.
To rein in the revenue expenditures, the government has begun taking steps to reduce the salary bill. This budget has announced a Voluntary Retirement scheme for government servants with a provision of Rs 10 Crore.
The Budget claims a GSDP Growth rate 7.07% at current prices. In real terms, after adjusting for inflation, this is actually just above zero. To be frank, given the uncertainty regarding the fourth wave of Covid-19, I think this prediction may prove hard to materialise.
On the revenue front, it should be a shock that Part B of the budget (revenue generation) was wound up in a single page (that also included a lot of cultural and historic references and emotional appeals). The only measure taken in this aspect is the promise to “plug revenue leaks and fortify compliance”. To me, it doesn’t look like a sufficient measure at all. In fact it raises an important question – is the CM admitting that the revenue collection and enforcement machinery is SO lethargic that large gains can be made simply by plugging the leakages? This, coming from a BJP CM after 10 years of BJP rule in the state, just makes it a joke.
“The chief minister has made a lot of announcements but he hasn’t said where he is going to get the money from,” Congress leader Digambar Kamat said in his reaction, and I think many will agree with him.
Besides, there have been multiple announcements without fund allocations. It will be interesting to see how many of these are actually implemented. If the past track record in this regard is to be considered, more than half of the announcements from last year’s budget are yet to be touched.
In conclusion, I’d say that the government has shied away from doing anything new and exceptional to address the concerns in the economy. However, it is only natural, given the resource crunch for the government. The coming five years will be challenging for BJP and allies in Goa. The road to bring the economy back on track is a long and hard one.
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