Sandesh Prabhudesai
5 October 1999
"I don't care even if I lose my position as the chief minister, but I will not bow down before the pressure from the business groups", says chief minister Luizinho Faleiro while disclosing his intention to take more stringent steps for resource mobilisation.
At a press conference convened specially to explain the deteriorating financial health of the state, he has also announced his plans to release a white paper on economic health within 20 days, followed by a comprehensive industrial policy.
Though he still maintains that industry has to bear the burden of resource mobilisation as the per capita tax is highest in Goa (Rs 2264.17), Faleiro however is not averse to the idea of relaxing his decision to impose 50 per cent out of total sales tax exemption in case of tiny and small industries having investment below Rs 60 lakh.
All the industries in Goa have presently flexed their muscles to fight the 28-year old system of granting 15 year-long sales tax holiday. The small industries have stopped dispatching goods in the market in protest, while warning closure in future.
"Our sales tax and excise duties together makes up 83 per cent of our revenue and there is little scope to tax higher due to the narrow base. It is time the industry shares the burden of raising resources", says Faleiro.
Stating that withdrawal of sales tax exemption is a step towards fiscal management, the chief minister also discloses his plans to put the generated resources into a separate Infrastructure Development Fund, to be used for creating infrastructure.
The rupee break-up of Goa shows that 33 paise go into salaries, 4 paise into pensions, 12 paise into grant-in-aid, 22 paise into interest payment and public debt and 14 paise to others like office expenses, local bodies, schools and colleges etc, leaving only 15 paise for capital expenditure.
He has now decided not to take any loan for non-plan expenditure as the government in the past has taken loans even to pay interest on the earlier loans. The authorities now fear losing credit rating if the same trend continues.
Faleiro has also advised the industries to cut their cost instead of raising prices to meet partial withdrawals of sales tax exemption, stating further that this alone would make Goan industry globally competitive.
In order to generate further revenue, he plans mainly to plug all the leakages in revenue generation like lotteries and wastage of water while also introducing land revenue in the state for the first time. "If I don't do it today, I will be never able to do it in the next five years", he quips.
While the tiny tourist state spends half of its expenditure on large number of government servants alone, it has slipped into a debt traps due to vote-bank oriented policy of implementing Vth pay commission while the central assistance has reduced from 37 per cent in 1991-92 to 15.5 per cent in 1999-2000.
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