Goa economy has worsened, says auditor general's report PANJIM, FEB 20 -- The Goa government's liabilities are growing much faster than its assets, interest payments of the State have risen sharply, and government corporations and companies are losing money for the State, says the latest auditor's report.
In a report that could severely challenge the BJP government's repeated claims of having managed the State's finances well, the Comptroller and Auditor General of India's findings for the year ended March 2002 raise a whole lot of critical questions about Goa's economy. "This shows an overall deteriorating in the financial condition of the government," said the report, while pointing out that the State government's liabilities had increased from Rs 2751.38 crore to Rs 3680.3 crore -- upto 34 per cent in a single year. On the other hand, it noted, assets had only grown 10 per cent in the same period. Other highlights that give cause for concern: l Revenue expenditure (Rs 2101 crore) in the audited year exceeded revenue receipts (Rs 1873 crore), resulting in a revenue deficit of Rs 228.5 crore. Roughly put, Goa government isn't able to meet its own running expenses. l Revenue expenditure accounts for a whopping 92 per cent of total government expenditure. It spurted by 23 per cent in 2001- 02. Non-plan expenditure constituted 91 per cent of this. In other words, bulk of government expenses goes to keep its machinery moving, not build up assets. l Some 61 per cent of revenue receipts came from non-tax revenue, with tax revenue getting in just 30 per cent. l Interest payments jumped by 121 per cent between 1997-98 and 2001-02, from Rs 118 crore to Rs 261 crore. Clearly, the debt burden is growing. There were other pointers to underline the economic pressures Goa is facing, despite the "feel good" re-assurances given by politicians in power. "Assets (of the Goa government) include significant amount of unrecoverable loans and investments in shares and companies which are loss making. These assets are not capable of generating any income," notes the CAG report available online at http://cagindia.org/states/goa/2002. On the issue of assets and liabilities of the State government, the CAG noted: "This ration indicates the solvency of the Government. A ratio of more than 1 would indicate that the State Government is solvent (assets are more than the liabilities)... "The ratio declined from 1:08 in 1997-98 in 1997-98 to 0.63 in 2001-02, which was indicative of the worsening financial position of the government, since the capital was applied to meet revenue deficit rather than asset creation." The CAG charged that its detailed analysis of the variations in budget estimates and the actual expenditure "indicates defecting budgeting and inadequate control over expenditure" by Goa. This, it said, was "evidenced" by persistent resumption (surrenders) of significant amounts every year vis-a-vis the final modified grant. It added that significant variations -- either excess or savings -- between the final modified grant and actual expenditure were "also persistent". CAG said an "increasingly large share of borrowings" had been applied for revenue expenditure, thus "making the State finance vulnerable to funding from outside sources. Thus, the higher revenue deficit, including heavy interest, has left little for investment, it added. "Persistently mounting interest payment, declining tax-to-GSDP ratio and galloping deficits indicated poor financial condition of the Government," said the CAG. The year it covered incidentally saw BJP rule in the state. CAG commented that there was a "significant deteriorating in the financial position of the State during the last five years (prior to the report period)", which saw the period of political instability in the State, including the short-lived BJP-supported Sardinha government. Other important points raised include poor or negligible by state-run corporations, co-ops and companies; taking of supplementary where not required; the "weaknesses" in the PWD's financial and programme management; poor target achievements in the Swarnajayanti Gram Swarojgar Yojana; questionable target- fixation in the Indira Awaas Yojana rural housing schemes. Also raised was the wasteful expenditure over failure to recover the cost of shifting a transformer and electrical line from a hotel beneficiary in Mobor-Cavelossim, failure to dispose of a decade-unutilised cold storage plant, and non-utilisation of an LIC loan for housing schemes while paying interest on it. Passenger tax amounting to Rs 1.22 crore was not recovered from the Kadamba Transport Corporation, as of March 2002. Also meriting concern was the mounting losses of Goa Antibiotics, the slow completion of accounts of government firms, and the losses that most of these were suffering. -- ------------------------------------------------------------------- February 2004 | Frederick Noronha, Freelance Journalist Su Mo Tu We Th Fr Sa | Goa India 0091.832.2409490 or 2409783 1 2 3 4 5 6 7 | ---------------------------------------- 8 9 10 11 12 13 14 | Email fred at bytesforall.org 15 16 17 18 19 20 21 | Writing with a difference 22 23 24 25 26 27 28 | ... on what makes *the* difference 29 | http://www.bytesforall.org ------------------------------------------------------------------- ########################################################################## # Send submissions for Goanet to [EMAIL PROTECTED] # # PLEASE remember to stay on-topic (related to Goa), and avoid top-posts # # More details on Goanet at http://joingoanet.shorturl.com/ # # Please keep your discussion/tone polite, to reflect respect to others # ##########################################################################
