PANJIM: The State government is repaying the loans availed during Manohar Parrikar’s regime 10 years ago even as Goa’s public debt stood at Rs 21,940 crore as on March 31 this year.
The BJP government has been under fire from the opposition for the rising loan burden and taking the State towards the debt trap. They had charged that every child in the State was born with a loan of Rs 83,000 per individual.
Chief Minister Pramod Sawant has often defended the government’s decision to borrow loans claiming that it has not crossed the borrowing limit. He is optimistic that the State’s revenues will increase once mining activity resumes in the next financial year.
But here are the historical facts:
The State is currently repaying the loans secured a decade ago.
The State has never faulted in refinancing the loans and is much within its borrowing limits. But loan burdens have an effect on future investments.
The situation would drastically improve once mining activity restarts, said an official, adding that even if the worst financial situation arises, a sinking fund has been created to meet such eventuality.
Manohar Parrikar’s government borrowed heavily through the RBI and through soft loans which pushed the debt burden higher. In 2017 public debt stood at Rs 12,000 crore. Six years later it has jumped by almost Rs 10,000 crore much of it due to past loans during the Parrikar era.
Way back in 2005 during his first term, the Comptroller Auditor General of India (CAG) had said that Goa is heading into a debt trap with persistent revenue and fiscal deficits year after year, together with low or no return on investments. Commenting on this, a political analyst said, “Parrikar never ceded control as Chief Minister or Finance Minister, till his last day. But history should also judge the man whose memorial has been built on the beach, on his fiscal decisions, like borrowing market loans at a high rate of interest, which has put Goa in such a debt trap.”
An economist said that the State budget has many loopholes and the Economic Survey 2022-23 clearly indicates that only 32 per cent of promises made in the last budget were fulfilled. This gives a feeling that due to paucity of funds, the promises could not be fulfilled.
Ex-GCCI Chief Sandip Bhandare said that the State government will be able to repay loans if it adopts a cautious path of balancing the future growth on one side and the fiscal deficit on the other side.
He too affirmed that market loans were taken at very high rates.
He said that the monies collected by e-auctioning of iron ore would help the State to meet the fiscal deficit targets. “How early you will do it is for the State government to decide,” Bhandare said.
According to a former key official in the Finance Department, the Sawant government is in urgent need of a prudent fiscal management policy. The economic outflow is far overreaching the revenue of the State and hence there is a mismatch between the targeted revenue and the receipts, which again would hamper meeting the commitments presented in the budget this year.
The State borrowings overshot due to the Covid pandemic and downscaling of the economy even as the e-auctioning of iron ore would generate monies, which could be utilised for repaying loans. Added to this, is the burgeoning government employees, whose ratio to population is 1:21, which is the highest across the country.
Also, a number of social security schemes and other requisites take away almost the entire revenue of the State. This clearly indicates that unless some harsh measures are taken and implemented, the State will land into a deep crisis.