Goa is a small state. It is facing a debt trap. The state’s outstanding liabilities saw a 618 percent jump.
In 2005, Goa’s outstanding liabilities stood at Rs 4417 crore. Now, in 2023, it stands at Rs 31,378 crore. This is going to be the greatest challenge for the Chief Minister of Goa, Dr Pramod Sawant to minimize the state’s debt.
This is not only a challenge but also an opportunity for the young Chief Minister to catch the bull by its horns and calm it down. Goa’s debt trap is a bull with sharp horns that can go wild in a china shop. It needs to be tamed.
An analysis of the data from the Reserve Bank of India (RBI) on state government finances highlights that Goa’s capital expenditure has increased from Rs 598 crore in 2004-05 to Rs 6,058 crore in 2022-23.
In 2005, Goa’s outstanding liability under the Congress-led government was Rs 4717 crore, Rs 709 crore was borrowed and in 2006, the debt stood at Rs 5126 crore.
In 2007, the Goa government led by the Congress under the leadership of Digambar Kamat borrowed Rs 715 crore more and the debt stood at Rs 5841 crore. In 2008 and 2009, Rs 811 crore and Rs 498 crore were borrowed by the Goa government taking the debt in those years to Rs 6652 crore and Rs 7150 crore. In fact, in 2009, the Goa government borrowed less than in 2008.
In 2010, Goa’s outstanding liabilities stood at Rs 8429 crore because the state government borrowed Rs 1279 crore from different financial institutions. In 2011, it borrowed Rs 1131 crore taking Goa’s debt to Rs 9560 crores.
From 2012 onwards, the BJP government was in power, and the Late Manohar Parrikar. In 2012, the Goa government decided to be prudent and only borrow Rs 391 crore taking the Goa debt to Rs 9951 crore. In 2013, the Goa government borrowed Rs 1303 crore taking Goa’s debt total to Rs 11254 crore.
In 2014, the BJP government in Goa was under the leadership of Laxmikant Parsekar. Goa government decided to further borrow and increase the debt burden, it borrowed Rs 2023 crore taking Goa’s outstanding liabilities to Rs 13277 crore. In 2015, the Goa government marginally reduced its borrowing when compared to 2014, it borrowed only Rs 810 crore but the debt burden increased to Rs 14087 crore. In 2016, Rs 1474 crore was borrowed taking Goa’s outstanding liabilities to Rs 15651 crore.
In 2017, the BJP government in Goa was under the leadership of the Late Manohar Parrikar. Goa borrowed Rs 1252 crore and the debt climbed to Rs 16903 crore. In 2018, the debt reached Rs 18642 crore because a further Rs 1739 crore was borrowed from different financial institutions.
In 2019, Dr Pramod Sawant took charge of the Goa government under BJP. Goa government borrowed Rs 1858 crore taking the debt burden to Rs 20500 crore. In 2020, a further Rs 2146 crore was borrowed with Goa’s outstanding liabilities touching Rs 22646 crore. Then during the COVID-19 pandemic period, the Goa government borrowed Rs 3967 crores taking the debt burden in 2021 to Rs 26613 crore. This was followed up in 2022 with the Goa government further borrowing Rs 1828 crore, which was considerably less than the borrowing in 2021 but the debt burden increased to Rs 28441.
Now in 2023, the Goa government has increased its debt burden to Rs 31758 crores by borrowing Rs 3317 crores more.
The challenge to Dr Pramod Sawant and the Goa government would be to minimize the burgeoning debt which even the CAG has been alerting the Goa government to keep a watch on and to put in measures to correct the rising debt trap.
Goa’s debt trap to the common man would mean that 1.6 million people in the state would have to shell out Rs 200000 each to ensure Goa gets out of the debt trap. More importantly, it is a known fact that most tax-payers form a small community in Goa of business people and middle-class residents of Goa, therefore the burden further increases on those honest tax-payers in the years ahead because of the non-paying tax population.
While the RBI data is alarming, Dr. Pramod Sawant can arrest the debt trap and stop the state from further going into a sinkhole by corrective economic measures. Expenses on social welfare schemes witnessed a phenomenal increase in expenditure in 20121-22 during the COVID-19 pandemic period at Rs 10,286 crores. Social sector spending in 2004-2005 was Rs 798 crore but it rose to Rs 8659 crore in 2021-2022. Unplanned expenditures must be kept under control failing which Goa’s outstanding liabilities are going to continue to rise up and our future generations will have to carry this burden.
Goa’s debt trap is not only a challenge but an opportunity for Dr Pramod Sawant to rise up as one of the tallest leaders in the state if he can get Goa out of the debt trap. There was a time, I am told by senior political watchers in Goa that former Chief Minister Dayanand Bandokar once told the Centre that Goa did not need money from the Centre it was self-sufficient. In fact, government financial data indicates that till early 2000, Goa was not a debt state.
RBI Goa
