CM WALKS THE TIGHT FISCAL ROPE DESPITE GST HICCUPS

# Pays back previous loans n Manages to Invest Rs 1,200 cr as capital expenditure on projects all funded through State revenues & loans

| OCTOBER 20, 2017, 03:07 AM IST
CM WALKS THE TIGHT FISCAL ROPE DESPITE GST HICCUPS

 

the goan I network
PANAJI
Chief Minister Manohar Parrikar has managed to walk the tightrope as far as Goa's financial situation is concerned over the last six months, between April and September 2017. This despite the hiccups to State's economy due to implementation of Goods and Services Tax (GST) from July 1.
This in a large part is on account of Rs 800 crore of fresh loans taken between April and September, this year, sources have informed. In the same period, however, the government has also managed to repay approximately Rs 600 crore of old loans ensuring that the overall debt situation did not worsen considerably in the last six months.
Despite paying back the previous loans, the government has managed to invest Rs 1,200 crore as capital expenditure on projects being undertaken by Goa State Infrastructure Development Corporation Ltd (GSIDC), Public-Works-Department (PWD) and Kadamba Transport Corporation (KTC), Electricity Department, Water Resources Department, GTDC, Sewerage Corporation, JICA projects and Sports Authority of Goa all funded through State revenues and loans.
The State's situation is complicated by the fact that there is a shortfall in tax revenue post implementation of GST.

State took ` 800 cr of fresh loans between April & September this year
Government also paid back ` 600 cr of old loans
Overall, State's debt position did not worsen considerably
Managed to invest ` 1,200 cr as capital expenditure on projects
Govt has to pay ` 280 cr per month on salaries and pensions, ` 57 cr per month on Griha Aadhaar Yojana and DSSS, ` 100 cr per month on other subsidies and ` 100 cr per month on power purchase agreement
State govt also spent ` 200 cr on capital asset creation and capital works in the last six months Sources revealed that government's tax revenue in GST regime stood at Rs 491.79 crore for the three month period between July and September, 2017. Last year, in the same time period under other indirect taxes like value-added-tax, tax revenue for the same 3 months had stood at Rs 628.27 crore.
In nutshell, the government managed to invest in capital expenditure in the last six months despite paying old loans and shortfall in tax revenue. In the last six months, the government made Rs 200 crore from capital asset creation and capital works.
All this while, the government had to pay its monthly expenses, which are recurring in nature. For example, the government has to pay Rs 280 crore per month on salaries and pensions, Rs 57 crore per month on Griha Aadhar Yojana and Dayanand Social Security Scheme (DSSS), Rs 100 crore per month on other subsidies and Rs 100 crore per month on power purchase agreement.
The challenge for Parrikar in the second half of this financial year is to manage the financial situation of the State. The recurring expenses like salaries, pensions, Griha Aadhar Yojana and others are not going to come down.
Meanwhile, mining, which is one of the significant contributors to State's revenue, is yet to begin for the next season. Iron ore prices continue to remain weak in the international market. Given that, it remains to be seen as to what extent mining will happen and how much the State government will earn from mining in the form of taxes.
Sources informed that several schemes and announcements made by the government regarding laptops, smart city, startups now hinges on the success of revenue collection under GST.
The other huge challenge is growing tax revenue in GST regime, but, there is positive news on this front. Dipak M. Bandekar, commissioner of commercial taxes, said, "We expect tax revenues in October 2017 to be higher than October 2016 tax revenues. Moreover, the central government has already paid to the state government whatever shortfall in tax revenue we had from July to September due to GST implementation."
Bandekar also mentioned that the commercial taxes department is educating traders about GST so that understanding about this tax improves. These ‘stun education drives' which are in fact mock raids on business establishments is an attempt to ensure that the establishments pass on the GST benefit to the consumers and not calculate GST on the total (including VAT they used to charge earlier).
Considering the present situation, the government on an average pays Rs 110 on loan repayment per month and Rs 100 crore on grant in aid and other expenses.

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