V M wrote: http://timesofindia.indiatimes.com/city/goa/From-Greece-to-Goa-The-anatomy-of-debt-traps/articleshow/47931800.cms
Despite large hikes in Goa's share of cash from the Central fund (this year up a whopping 10%), Goa's public debt is heading upward of 10,000 crore and the state is reduced to the fatal strategy of borrowing at market rates to service interest payments. No less than Greece, this is the definition of unsustainable economic policy. -snip- That highly reasonable analysis by (Laxmikant) Parsekar has been turned on its head by his own BJP government's outsized spending spree of a scale never seen before in Goa. A third Mandovi bridge for more than 600 crore, the controversial bridge to Tiracol (home to exactly 300 Goans) for more than 80 crore, extraordinarily dubious road-building and road-widening exercises for additional hundreds of millions of rupees. -snip- Just as the hated 'troika' of lenders and finance ministers imposed on Greece, Goa's political elites are now also talking of selective "austerity" which does not allow increased spending on the inadequate healthcare system, or on the state's woefully mediocre education infrastructure. Pay close attention to Greece by all means, because much the same is happening in Goa too. ------------------------------------------ Well written, VM. I only learned about the debt accumulated by the Goa Govt a week ago. The figures mentioned were higher than yours. The problem of course is, who is going to pay for these loans? Just like Greece, the day will come when the Goa Govt will not be able to service its loans and pay its bills. The first Govt service cut usually effects education, the next is health care and then it is the services provided to everyone else. There is an easy way to resolve this problem of overspending. All you need is a law that says any representative who votes to spend more than 106% of income received, will not be eligible for re-election to that position again. This is the only way elected representatives will come to their senses. They will either increase income collection (taxes) or decrease spending. Grexit is going to adversely effect more than Greece. You will soon hear of British banks who lent money to the German banks, who in turn lent money to Greek commercial banks. A week after the Greek businesses stop paying their invoices, US financial institutions will admit to have lent money to British banks that ultimately reached the Greece er, financial system. We are in for some interesting times (if one is not a Greece resident.) Mervyn PS. I wonder if it is too late to get some short positions? :-)
