GOA BUDGET 2000
Presented by Chief Minister Francisco Sardinha
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Uniform
Sales Tax | Entry
Tax | Sales
Tax Exemption | Excise
Proposals | Luxury
Tax | Green
Goa Fund | VRS
Sir,
1. I rise to present the Budget of the State for the year
2000-2001. This is the first budget of the new century, indeed
the new millennium and it gives me immense pleasure to present
it in this new, beautiful and aesthetic building of Vidhan
Sabha. With the dawn of a new century our great country today
stands at the cross roads of destiny. It is the duty of every
citizen to contribute his or her mite to make this country
prosperous and progressive so that it can assume its rightful
place in the comity of nations.
2. I have just had the privilege of laying on the Table of
this august House, the Economic Survey of the State for the
year 1999-2000. It is for the first time that a full-fledged
Economic Survey of Goa has been prepared and presented which
contains salient features of the state economy. This step
is a concrete reflection of my Government's commitment to
transparency. In view of the material already made available,
I do not wish to give a detailed account of the achievements
made but to refer to them as necessary in presenting the main
budgetary issues before us.
3. In our small and progressive State of Goa our achievements
in all spheres of life are commendable. We rank high on the
scale of socio-economic indicators in the entire country.
However we must not become complacent and rest on the laurels
for greater challenges lie ahead of us. For example, a high
debt to state GDP ratio, highest in the country, which is
a legacy of the past, continues to be a matter of concern
as interest payments have increased exponentially over the
last few years. This needs to be addressed in a diligent and
focussed manner. It is my firm belief that with the cooperation
and assistance of one and all, we will definitely emerge as
winners.
4. The budget, Sir, is an embodiment of the aspirations of
the people of the State – it is a blue print of the path of
growth and development which we wish to charter during the
course of the coming year. The budget is also a versatile
instrument for translation of economic growth into social
equity. As any venture into the future has to be based on
the experience of the past, I would briefly dwell upon the
fiscal situation in the last financial year.
1999-2000 (B.E) & (RE):
5. Sir, under revenue receipts there was a record increase
in sales tax collections. My government has been able to mobilize
Sales Tax receipts to the extent of Rs.335 crore representing
an increase of Rs.81.00 crore, that is, 32 % over 1998–99
and 15.2 % over the budgeted estimates. In the preceding few
years, growth rate of Sales Tax collections had stagnated
at only about 5% annually. The Sales Tax Amnesty Scheme introduced
by my Government was a resounding success and the collection
as on date stands at Rs.8.00 crore confounding the doomsayers
opposed to this scheme. I hope, fervently, Speaker, sir,
that a belated realization would now dawn on those so called
financial wizards that nobody can stop an idea whose time
has come and the Sales Tax Amnesty scheme was precisely such
an innovative idea of my Government, which has succeeded in
mopping up additional resources. We are also in the process
of tightening the loopholes in the tax laws as well as simplifying
tax procedures to ensure better compliance in future. Revenue
expenditure on the other hand, grew due to a variety of reasons
including implementation of revised pay scales of teaching
staff of colleges and universities (involving an outgo of
over Rs. 14.00 crore) and reduction in retirement age of government
employees from 60 to 58 years that led to an increased outgo
of more than Rs. 33.00 crore under pension, commutation and
gratuity. Revision of budgetary estimates on salary was necessitated
on account of payment of Fifth Pay Commission arrears, which
involved an outgo of Rs. 23.5 crore.
6. Under capital receipts, market borrowings and share in
small savings increased to levels more than those budgeted
at BE stage. Though normal central assistance from GOI remained
by and large at the same level, State Government could not
avail of the loan under Accelerated Irrigation benefit programme
due to delay in the constitution of Tillari Irrigation Corporation.
Capital receipts were further augmented by a considerably
larger contribution from the public account. The increase
was initially on account of impounding arrears arising out
of revised scales of teaching fraternity and finally due to
a short-term deposit of Rs.47.00 crore as Government, in a
bid to match its resources with its expenditure commitments,
had to resort to availing short-term loans.
7. Sir, as a result of deft and skilful financial management
my Government was able to enhance the capital outlay to levels
higher than those budgeted, in all sectors except irrigation.
The short-term deposit also enabled my Government to contain
the over-all deficit at almost the budgeted level and thus
end the year with only minus Rs.11.50 crore which is lower
than the budgeted figure of minus Rs. 13.14 crores. This is
well within the extent to which Reserve Bank of India permits
rollover. However, there is a flip side to this. Budgetary
deficit could be controlled only through a worsening of the
fiscal deficit. Fiscal deficit, a measure of net borrowing
requirements deteriorated from minus Rs. 303.50 crore in B.E
to minus Rs. 384.17 crore in R.E implying that borrowings
financed a higher proportion of expenditure than was originally
envisaged at B.E level. This was imperative because the wheels
of development cannot be allowed to come to a grinding halt
on account of temporary resource crunch.
8. Sir, moderation is the essence of all virtue. Borrowings,
in moderation and with caution are a virtue. Borrowings in
extreme, however, turn this virtue into a vice. The latter
has unfortunately, been the case so far. The net borrowings,
as reflected by the size of fiscal deficit, exceeded plan
expenditure of Rs.241.00 crore for 1999-2000 (RE) due to increasing
commitments under non-plan. It is noteworthy that under non-plan
the burgeoning expenses on salaries and establishment, interest
payment and subsidies continue to be serious impediments towards
sound financial management. Coupled with these are the less
than desired levels of receipts from non-debt sources like
tax and non- tax revenues. Sir, it is my endeavour to address
these issues squarely in respect of the coming year and take
necessary steps to initiate bold, though, prudent macro –
management policies in order to inject a new lease of life
into the economy. With this intention in mind I now turn to
the budget proposals for the year 2000-01.
Receipts:
9. Sir, consequent to the recommendations of the Eleventh
Finance Commission, it is expected that Goa's share in Central
taxes - both in relative and absolute terms - will increase
considerably. A significant pointer in this direction is a
substantial provision made in the Union Budget under share
in central taxes and non-plan grants to States. Though the
exact share of each state is yet to be ascertained, conservative
estimates indicate an increase in Goa's share by about Rs.30
crore over and above the figures reflected in the Budget of
2000-01. This expected additionality has not been included
in the budget. We also expect some additionality on account
of increased plan assistance and SLR based market borrowings.
All this will be communicated to the State Government during
my meeting with Deputy Chairman, Planning Commission which
is likely to be held sometime in April/May 2000. Given the
increasing developmental needs of the state, however, this
additionality by itself would not suffice to provide adequate
resources. Additional revenues need to be generated by augmenting
present sources of revenue as well as exploring newer sources
of finance within the State.
State Taxes:
10. Sir, though enhancing tax revenues is one of my primary
concerns, I do not intend to do so by arbitrarily increasing
the tax rate. I am also extremely conscious of not letting
it adversely affect the life of the common man. Sir, as you
are aware, all States have consented to levy uniform floor
rates of sales tax for a number of categories of items with
effect from this year to pave the way for introduction of
value added tax (VAT) in near future. Implementation of uniform
floor rates of taxes on which there is a national consensus
would not only de-escalate the tax war among States but also
help in augmenting the revenues. However to ensure that interests
of our small State are not affected adversely, we have to
explore mitigating options in terms of concessions and incentives.
In addition, the current Sales Tax revenues of the state indicate
an excessive dependence on petroleum products to the extent
of almost 57% of the revenues collected. It would be my endeavour
to correct this distortion by seeking to rationalise and broad
base the sales tax regime.
11. Sir, in Goa, adherence to uniform floor-rates
will imply elevation of existing sales tax rates of a number
of categories of goods. However, my Government desires to
make a few exceptions in the overall interest of the state
to which I will revert in a moment. The categories of goods
for which I propose to accept the levy of sales tax at levels
equal to or more than the uniform floor rates are being laid
on the Table of the House and with your indulgence I wish
to take the liberty Sir, to skip reading out the list as it
is voluminous.
12. In order to give relief to medium and small traders, I
propose to modify the present levy of additional sales tax
under Goa Sales Tax Act, 1964 which is applicable at present
to the dealers having annual turn over of Rs. 20.00 lakh.
I propose to make this levy applicable to those dealers having
a turn over of Rs. 2.00 crore or more per year. To make good
the revenue loss likely to be incurred on this account, I
propose that the levy of additional tax be at the rate of
15% of the tax for dealers with a turn over of Rs. 2.00 crore
or more but less than Rs. 7.00 crore; at 20% of the tax for
dealers with turn over of Rs. 7.00 crore or more but less
than Rs. 15.00 crore and 25% of the tax for dealers with an
annual turn over of Rs. 15.00 crore or more.
13. I had made a reference earlier, Sir, that certain exceptions
are proposed to be made from the levy of sales tax at uniform
floor rates keeping in view the local considerations. Accordingly,
I do not propose to change the sales tax rates for cashew
nuts and cashew kernels, printing ink, cooking gas (LPG) for
domestic use, country liquor, coconut in shell and separated
kernels, plantain leaves, mangal-sutra, stamp paper, toys,
school exercise and drawing books, locally manufactured biscuits,
bread, toasts, cakes and pastries, school bags, pens, pencils,
refills not exceeding Rs. 10/- per piece, crash helmets, tricycles,
instruments for educational purposes, fishing requisites and
fish twines and handicrafts made from clay and paper. Sales
tax in respect of other handicrafts from cane and bamboo,
earthen ware made by Kumbhars, hand made utensils and country
made shoes (Juties) will also continue at zero percent. Besides
the above list which is not exhaustive I propose to keep many
other items of mass consumption of the common man outside
the purview of the tax structure. With this move, the government
of the people, by the people and for the people is no longer
a worn out cliché, but has indeed been translated into a sweet
reality.
14. While the uniform floor rates framework initially envisaged
an enhancement of Sales Tax on Motor vehicles from the present
4 percent to 12 percent, it was later decided to address the
issue at a subsequent juncture. In order to phase in a gradual
increase in the cost of motor vehicles, my Government has
decided to raise the sales tax on motor vehicles to only 6
percent. As regards petroleum products, I would like to make
a specific mention. These products are proposed to be levied
sales tax at the rate of 20% in consonance with the uniform
floor rate of taxes with the exception of diesel, naphtha
and furnace oil which will be levied sales tax at the rate
of 18%. Even after this increase in petrol prices by 70 paise
and diesel prices by 13 paise, the prices in Goa would continue
to be lower and consequently more competitive than neighbouring
states where incidence of taxation on these items is as high
as 30%.
15. Once the uniform floor rates under sales tax are in place
with effect from 1st April 2000, we expect an accrual of Rs.35.00
crore in 2000-01. Given the certainty of this accrual, we
have included it in the budget. This step will go a long way
in ensuring that Goa marches in unison with all the other
states in ushering in rationalisation of tax rates.
16. Sir, as a result of our conforming to the uniform VAT
regime as per the directives of the Central Government, Goa
faces the potential danger of losing sales tax revenue on
account of shift of purchase of industrial raw material from
local dealers to dealers in neighbouring states thereby negatively
affecting local taxation. Sir, it is imperative to plug this
loophole otherwise the projection of Rs.35 crore additional
accrual may not be realised.
17. Sir, while my Government is keen to
support industries with fiscal and infrastructure support,
we do not want our State to become only a processing zone.
At present, a large volume of raw materials used for manufacturing
is brought into the State from the neighboring States. Similarly,
a large volume of finished products is moved out of the State
to sale outlets elsewhere without any accrual of sales tax
revenue to the state. In the process, the State does not earn
any revenue in spite of providing all the necessary infrastructure
facilities. Moreover, such a system leaves the local traders
at a disadvantage, since the goods purchased from across the
state turn out to be cheaper as the latter escape the local
sales tax net. To rectify this, I plan to levy an entry tax
on all goods entering the state except those meant for sale
in the State. It is expected that with the levy of this tax,
trade relating to a number of categories of goods will shift
to Goa where it ought to have been in any case. This will
provide encouragement to the local trade. In addition, the
unfair advantage available with the manufacturers to purchase
raw materials from across the border will reduce to an extent.
The exact modalities of levying such a tax are being worked
out and will be notified shortly. Keeping in view the interests
of the small-scale industries, I intend to exempt SSI units
from payment of entry tax except Ferro alloys, steel melting,
pharmaceutical and chemical units. We expect an accrual of
Rs.25.00 crore in 2000-01 on account of Entry tax. The amount
has been included in the budget.
18. One of the existing concessions in Goa
that is at variance with other States pertains to accord of
fiscal incentives to infant industries in terms of sales tax
exemption. In principle my Government does believe in replacement
of fiscal incentives to industries with infrastructure support.
In fact, in the era of second generation reforms, gradual
phasing out of fiscal incentives to industries has evolved
as a primary objective of Governments at all levels. However,
such phasing out is inextricably linked to the availability
of adequate infrastructure. In the absence of local availability
of un-interrupted power supply, quality road network, adequate
water supply and technical manpower, State Governments have
little else to offer other than fiscal incentives.
19. In Goa, it is all the more so. This is because apart from
inadequate infrastructure, our environmental concerns forbid
the entry of polluting industries. As a result, the prospective
industrial entrants comprise a smaller list. These infant
industries are most important to our economy in terms of enhancing
our production base and generating local employment opportunities.
20. In this regard, my Government had recently made a submission
to Union Finance Minister in the context of continuing with
income tax exemption to industries in Goa that was due to
expire on 31st March 2000. We had argued that until such time
that the quality of infrastructure support is reasonably enhanced,
income tax exemption to industries in Goa must continue. I
am happy to State that Government of India has indeed taken
cognizance of the requirement of fiscal incentives and agreed
to extend income tax exemption for another two years. We are
indeed grateful to Hon'ble Prime Minister Shri Atal Behari
Vajpayee and Hon'ble Union Finance Minister Shri Yashwant
Sinha for their sympathetic consideration of the entire issue
and hope that Goa will continue to have a special place in
their hearts for all times to come. My Government is keen
to take a marching step forward and we have accordingly decided
to extend sales tax exemption for another two years. This
exemption would be applicable to SSI units for 10 years and
MSI / LSI for 5 years except for those industrial units which
are polluting in nature.
21. This decision may appear to be a temporary setback as
far as raising revenues are concerned. However, the increased
pace of industrialisation in response to fiscal incentives
will ultimately broaden the tax base of our State and raise
our revenues. It is also proposed, as a step towards rationalization,
to make available an option to the industries within this
period of sales tax exemption to collect the sales tax at
the prescribed rates, retain 20 percent of the amount as a
subsidy and another 50 percent of the amount as an interest
free loan for a period of ten / five years. The remaining
30 percent of the amount will be liable to be deposited by
the industrial unit to the exchequer. The subsidy amount will
however not be permitted to exceed the total investment made
by the industrial unit after taking into account any other
subsidy that may have been sanctioned in favour of or received
by that particular unit. Existing units, which are currently
enjoying Sales Tax exemption, shall also be eligible to opt
for this scheme for the balance period of their exemption.
22. Governments in the past have not been
keen on raising excise duties on liquor. While there may be
social reasons for doing so elsewhere, in Goa we have cultivated
an individual and social understanding that disciplines itself
against frivolous outbursts that are so commonplace in other
parts of the country. However, economic reasons for raising
excise collection are compelling. My Government has thus decided
to increase the renewal of Excise license fees for manufacture
of IMFL to Rs. 40, 000; for manufacture of Beer to Rs. 1.50
lakh; manufacture of Wine to Rs. 20,000; manufacture of Rectified
Spirit/ Grain Spirit/ Malt Spirit/ Additives to Rs. 75,000
and manufacture of Country Liquor out of rectified spirit
to Rs. 20,000.
23. The wholesale vendors of IMFL with annual turn over of
Rs. 10.00 lakh or more are proposed to be levied and annual
license fee of Rs.25, 000 and similar vendors of country liquor
Rs. 20,000. Whole sale vendors of IMFL with annual turn over
of less than Rs. 10.00 lakh will be charged annual license
fee of Rs. 10,000 in cities, Rs. 7,000 in towns and coastal
villages and Rs. 4,000 in villages. Similar whole sale vendors
of country liquor will be charged Rs. 6,000, Rs. 3,500 and
Rs. 2,000 per annum as license fee in cities, towns & coastal
villages and villages respectively.
24. Retail vendors of foreign liquor 'A' category are proposed
to be levied an annual license fee of Rs. 55,000; 'B' category
Rs. 40,000 and other shops Rs. 25,000. Such licenses shall
be able to affect sale at authorized additional points by
paying an additional 50 percent of the license fee. Retail
vendors of IMFL/ Country Liquor 'A' category will be charged
Rs. 25,000 and for 'B' category Rs. 16,000 per annum as license
fee.
25. Retail vendors of IMFL/ Country Liquor (consumption) are
proposed to be charged an annual license fee of Rs. 5,000
in cities, Rs. 3,000 in towns and coastal villages and Rs.
1,500 in villages. Similar vendors of country liquor will
be charged Rs. 1,500, Rs. 1,000 and Rs. 700 respectively.
Retail vendors of packed bottles are proposed to be charged
Rs. 5,000 in cities, Rs.3, 000 in towns and coastal villages
and Rs. 1,500 in villages.
26. Sir, my government is seized of the problem relating to
excise evasion by IMFL manufacturers particularly those producing
cheaper brands. One of the reasons for this has been a uniform
excise duty structure for all brands of IMFL. Rationalisation
of policy on IMFL is the need of the hour to plug leakages
and augment revenue. I propose to introduce a dual duty structure
for IMFL based on Maximum Retail Price. Duty on IMFL for brands
for MRP below Rs. 50.00 per 750 ml will invite a levy of Rs.
12 per bulk litre and for all other IMFL, it shall continue
to be at the existing rate of Rs. 35 per proof litre. Additional
accruals on account of amendments of excise rates have been
included in the revenue projections including the proposal
to charge additional license fee of Rs.1.5 lakhs for bars
and restaurants in hotels desirous of serving their clientele
for specified number of hours beyond 11pm.
27. My government had earlier done away with the system of
imposition of import duties on Beer imported from outside
the State. This step was taken to arrest declining beer sales
through making beer more affordable. As a further step in
that direction, I propose to reduce the excise duty on mild
beers (less than 5% V/V) from Rs.9/- per bulk litre to Rs.8/-
per bulk litre. However, the revenue loss, if any, on this
count shall be offset by increasing the duty on strong beers
from Rs.12/- per bulk litre to Rs.14/- per bulk litre. Manufacturers
of wine using rectified spirit will now attract duty of Rs.6/-
per bulk litre. Sir, my friends in the opposition would,
by and now, be clear in their minds that the government does
not mind people drinking but does not want them to get drunk.
28. This explicit policy of the government is sought to be
further fortified by making the grant of licenses for sale
of beer easier than that of hard liquor. The beer licenses
would be allowed to sell only packed cans/ bottles and would
be levied an annual license fee. The bottling fees on IMFL
shall now be levied at the rate of Rs.2.50/- per case of 9
bulk litres.
29. Stamp duty is another area where the State can garner
considerable amount of additional resources particularly if
duties are levied on the actual value of property and not
on the value declared by the seller/ purchaser. While it may
be impracticable to ascertain actual value of the property,
region specific rates could be realistically determined and
applied as floor rates. My government has already started
moving in this direction by undertaking an exercise to reassess
and declare land rates to be reckoned for purposes of registration
of sale deeds in various zones in the State. The revision
of declared value of land and consequent collection of stamp
duty is likely to generate at least Rs.15.00 crore in 2000-01.
This has been included in the budget of 2000-01.
30. My government had recently fulfilled
a long-standing demand of the tourism sector by declaring
it as an industry. In accordance with this declaration, a
package of incentives for this sector is now envisaged in
order to put it on the high quality growth path. Henceforth,
the tourism sector would be levied power and water tariffs
at par with industry. I proposed to rationalise the existing
luxury tax structure by introduction of two slab rates only
of 8% and 12% as against the existing slab rates of 5, 10
and 15 %. The tax will be levied on entire billing pattern.
My thrust would be to ensure promotion of high – end tourism,
which is directly beneficial to the economy and is sensitive
to environmental concerns and social sensibilities of the
people of the state. As far as food and beverages are concerned,
I proposed to lower the tax rates from the existing slabs
of 4%, 8%, 12% and 15% to 4%, 8%, 10% and 12% respectively.
31. Sir, to sum up, my tax revenue efforts are geared towards
mopping up additional resources and boosting local industry,
trade and employment. The new optional scheme in lieu of sales
tax exemption would realise the twin objectives of augmenting
the cash flow of the individual units as well as swelling
the government coffers to the tune of approximately Rs. 5.00
crore.
32. Sir, I now come to my non-tax proposals. With the commissioning
of the Reliance Salgaonkar Power Project the quality of power
supplied has improved. However, there has been an increase
in the cost of power also. In order to partially recover the
increased costs, the power tariff needs to be further rationalised
in due course.
33. Sir, with increased commercialisation of activities, which
were earlier considered to be traditional in nature, it is
only appropriate that these activities also contribute towards
the process of growth and development of the state. It is
to this effect that my Government is contemplating imposing
fees on hoardings throughout the state at the rate of Rs.4,
000 per hoardings per year or part thereof. These fees shall
be collected by the Directorate of Municipal Administration
and Directorate of Panchayats and the proceeds thereof shall
be channelised for improvement of urban and rural infrastructure.
In addition, some nascent services which are increasingly
being operated on a commercial basis are also on the, 'Watch
List' of my government and I shall revert to them at an appropriate
time after studying various implications.
34. Sir, one of the problems associated with enhancement of
various license fees and charges is the infrequency at which
such revisions are carried out. This invariably results in
a manifold increase that is perceived as a burden by the consumers
though the increase in collections may be modest owing to
a small base fixed years earlier. I propose to take corrective
action by instituting more frequent but modest and gradual
increases in these charges/ fees. Some of the fees proposed
to be revised during the year relate to shops and establishments,
issue of arms licenses, renewal of sanads, fee/ deposit on
contract labour and fees charged by schools and colleges in
relation to various courses. This would be a small step in
ensuring better and focussed administrative services in the
state.
35. My Government proposes to rationalize the license fee
in respect of licenses granted to five star hotels and others
for electronic gaming/ slot machines. The application fee
for the grant of new licenses is proposed to be fixed at Rs.
5 lakh for a set of 20 machines/ stages or less for five star
hotels; the annual recurring fee will be levied at the rate
of Rs. 30,000 for the mother machine and Rs. 20,000 per additional
stage. Stand alone machine will be levied license fee equal
to mother machine. For electronic gaming/ slot machines provided
on board ships/boats the annual license fee would levied at
the rate of Rs. 50 lakh for a set of 20 machines/ stages/
tables or less. The security deposit chargeable in all cases
would be equal to one year's recurring fee, payable at the
time of grant of new license or renewal thereof.
36. Sir, as we step into the future, we do so carrying legacies
of the past. One such legacy relates to inadequacy of resource
availability for all development imperatives. It is also true
that whenever resources are raised, the public demands to
know the exact purpose for doing so. While it is difficult
to always connect mobilisation of additional resources with
objective to be fulfilled, my Government wishes to make a
beginning by proposing a number of Funds that will be financed
through levy of specific cesses. The funds will be augmented
through contributions from the State and Central Governments,
other institutions and stakeholders. The public concern about
accountability in spending of public money shall be suitably
addressed by this innovative mechanism introduced by my government.
Green Goa Fund
37. Sir, environment today is the concern
of every right thinking individual and rightly so. My Government
is also sensitive to environmental concerns. To improve the
environment of mining areas my Government proposes to levy
a cess on the mining activity including trans-shipment of
mineral ore from one mode of surface transport to another,
at the rate of Rs.2 per tonne of ore extracted within the
State and Rs.5 per tonne of ore (including coal) brought into
the State for the purpose of shipping. This is likely to generate
an annual return of approximately Rs. 6.00 crore. These proceeds
will be put into the Green Goa Fund and utilized for the purpose
of improving water supply and roads as well as afforestation
and control of dust pollution in the regions directly affected
by mining activity, that is, Curchorem, Sanvordem, Sanguem,
Pale, Mayem, Bicholim and Poriem. The schemes will be executed
through Public Works and Forest Departments while finance
department would monitor the implementation The State Government
will make an initial contribution to the fund for which a
budgetary provision has been made.
Plastics containment Fund
38. The litter of plastic waste is a scourge to the eye and
the material is non-biodegradable even over long periods.
If we have to save our environment from the detrimental effects
of plastic, we have to prevent indiscriminate dissemination
of plastics. We have to contain plastics. My government will
make an initial contribution to this new fund while the major
contribution will come from cess proposed to be levied on
industries using plastic packaging material. Mineral water
bottles using plastic packaging will attract a levy of 50
paise per bottle as cess. This is the best we can do short
of banning plastic packaging material. The proceeds from the
cess will be spent on schemes relating to collection of used
plastic packaging material and it's recycling. The schemes
will be implemented through Municipalities, Panchayats and
NGOs. I would request NGOs and environmental groups to work
as equal partners with the government in containing this menace.
The revenue accrual on account of imposition of this cess
is expected to be in the region of Rs. 3 crore.
Beaches Improvement Fund
39. The proceeds into the fund will comprise an annual license
fee of Rs.25, 000 on shacks, contributions from the State
Government, Central Government, hotel industry and other stakeholders
of tourism. The fund will be utilized for schemes implemented
through NGOs, cooperative societies, civic bodies and voluntary
participation of public particularly students. The schemes
would entail removal of garbage from the beaches and its eventual
disposal. Funds will be spent on specific beaches in proportion
to the collection from those particular beaches. This move
would also give a fillip to voluntary efforts to keep our
beaches clean.
Dairy Development Fund
40. My Government proposes to levy a cess of 15 paise per
liter on milk for the purpose of promoting dairy development.
The proceeds from the cess will be used to augment the cattle
population, which in turn will enhance the milk production
in the State. The idea is to become self-reliant as far as
milk production in the State is concerned and ultimately an
exporter to other States. An initial contribution to this
fund has also been provided in the budget. This special purpose
fund would further augment the budgetary provision already
made for the sub-sector of dairy development under Animal
Husbandry.
Control of Expenditure
41. Sir, downsizing the government and curtailing wasteful
expenditure are long pending issues both at the Central and
State levels as every penny saved is a penny earned. Time
has now come that the responsibility of controlling expenditure
can no longer be shirked. Piece-meal efforts have been made
in the past in the form of economy measures, deferring expenditure
and so on. However, these have not yielded the desired results.
It is being increasingly realised that the role of government
has to shift from that of a producer of goods and services
to one of an efficient regulator and facilitator. Barring
a few items that are of strategic importance, leaving the
processes of production to the private sector is the order
of the day. For investment in social sectors where market
forces fail to play the desired role, however, government
intervention will continue to be a necessity in foreseeable
future.
Voluntary Retirement Scheme:
42. Sir, my Government has recently announced
a scheme for voluntary retirement of employees in government
and government-aided institutions. The scheme proposes to
give substantial additional incentives to employees wishing
to take premature retirement voluntarily. The details of implementation
of the scheme are being worked out. I am happy to announce
that we are perhaps the first State in the country to evolve
such a scheme for government employees on the lines of Public
Sector Corporations. Sir, I take this opportunity to further
clarify the focus of the scheme with regard to posts falling
vacant consequent to employees availing VRS. Sir, the basic
precepts of sound public administration enunciate the role
of government as an ideal employer. However in the recent
past the government had not been able to fulfil this important
obligation leading to a distortion in the employment market
in the state. As a result, there are too many people chasing
too few jobs in the private sector leading to imbalance in
the job market. It is my bounden duty to step in and redress
the situation even in a small measure. I propose to introduce
my 'LEANER GOVERNMENT YOUNGER GOVERNMENT' scheme under which
forty percent of the posts falling vacant owing to retirements
will be abolished with immediate effect and 60% of the posts
will be filled up progressively in stages. However, filling
up of even these posts will be contingent on prospective candidates
successfully completing a course in Staff Recruitment and
Training School, which will be set up for the first time in
the State to mould human resource and optimise its potential.
Establishment of the school will be financed through savings
generated out of VRS and the training will include an 18 months'
course on all aspects of Government administration, laws,
governance and management. The trainees will be exposed to
computers and imparted adequate skills that would assist them
in their future work in the government. The school will not
involve any additional expenditure on staff since existing
staff from Government will by and large comprise the team
of instructors. The candidates enrolled in the school will
receive a monthly stipend of Rs. 1500 and will be absorbed
after successful completion of the 18 month course. Sir, I
seek to reverse the phenomenon of greying of the bureaucracy
and infuse young blood which is geared and trained to meet
the growing demands of governance in the new millennium. Such
thinking was necessitated on account of a bloated bureaucracy,
which is badly in need of trimming, a point driven home even
by V th Pay Commission.
Decentralization:
43. Decentralization of existing activities is another step
towards efficient expenditure management. With the recently
held election to Zilla Panchayats, functions have to be transferred
to the local bodies. With such transfer, the concerned utilities
would receive special focus and targeting of services to the
people would improve substantially. Related to this are the
issues of transfer of personnel and finances to these bodies.
My government is actively considering the recommendations
made by the State Finance Commission and I hope to make concrete
announcements in this respect soon. Greater accountability
and accessibility, I believe, would substantially reduce frivolous
expenditure in this process of decentralization.
Government Corporations:
44. My government proposes to set up a committee to streamline
asset management of government and public sector enterprises
and also to suggest measures for introduction of modern corporate
management practices and techniques to employees of PSU's.
To ensure that EDC is on a self sustaining growth path in
the long term, I propose to make a budgetary provision of
Rs.1.00 crore to reorganise the equity base of the Corporation
to make it more conducive to its own decision making.
45. Sir, while the revenue raising measures are likely to
show results immediately, the expenditure management exercise
is a medium term affair and would take some time before showing
concrete gains. Measures such as the Voluntary Retirement
Scheme would involve some initial costs and the gains would
be perceptible after a certain span of time. However the additional
resource mobilisation measures outlined by me would entail
an accrual of an amount exceeding Rs.75.00 crore.
2000-01(BE):
46. Sir, having outlined the revenue generation measures,
I now turn to the key figures for this year's budget. Utmost
care has been taken to control revenue expenditure. Apart
from salary and pension, grants-in-aid and interest burden,
which are committed expenditures in any case, other expenditures
have been pegged at almost the same level as that of the previous
year's budget estimates. Revenue deficit is budgeted at minus
Rs.159.88 crore and Budget deficit has been projected at minus
Rs.11.69 crore. The fiscal deficit is of the order of minus
Rs. 380.18 crore. However, as I have mentioned earlier, the
figures are not inclusive of the additional resources expected
on account of larger devolution from Central Government. Further,
my Government intends to vigourously pursue methods for improved
management of power and stricter enforcement of Sales Tax/
Excise laws. With these added resources, Sir, I am confident
that I would be able to not only wipe off the budget deficit
but also generate a surplus in 2000-01.
47. Sir, there are a number of areas where more funds need
to be allocated in order to pursue on-going and/ or urgent
schemes. These include Sports (Rs. 1 crore for improvement
of Panaji stadium, Fatorda Complex and Mapusa swimming pool),
Information Technology (Rs. 2 crore for infrastructure development),
Industries (Rs.3 crore for subsidy to smaller industries),
Health (Rs. 2 crore for trauma care and modern 24 hours trauma
ambulances fitted with wireless), Transport (Rs. 2 crore for
up-gradation of bus-stands in Panjim, Margao and Mapusa),
Irrigation (Rs. 2 crore for minor irrigation), Forests (Rs,
2 crore) and value added Agriculture including floriculture
(Rs.1 crore). Inland water transport (Rs.1.00 crore for improvement
of Inland Waterways), Social Welfare (Rs.1.50 crore for Anganwadis).
Additional resources to PWD will be provided through the Green
Goa Fund (Rs.6 crore) and to Urban Development through Plastic
Containment fund (Rs. 2 crore). Education department and Electricity
department shall be allocated Rs.2.00 crore each through their
internal resource generation and savings which shall be used
for construction of school buildings, Government Polytechnic,
Curchorem and for underground cabling of important cities.
I also propose to allocate Rs.1.50 crore for computerisation
of Government departments. These would be the priority areas
for allocation of additional funds in case we are able to
generate the surplus I have mentioned earlier.
48. As per the budget proposals, of the total resources, 52%
is accounted for by state's own tax and non tax revenues,
12% comes from grants-in-aid and share in central taxes received
from the Central government. The remaining 36% are accounted
for by borrowings. On the expenditure side, debt repayment
comprises 22% of the total disbursement. Salaries, pensions
and wages and other establishment expenses account for another
37%. Grants in aid and other financial contributions account
for 15% of the total. It may be noted that of this 15% a major
chunk goes towards meeting the salary obligations of government
aided institutions. The remaining 26% are used for major and
minor works, maintenance and supplies.
49. Sir, the composition of this expenditure is a legacy of
the past. It is also true that this composition cannot be
favourably changed in a short time. However, a gradual process
to increase expenditure under works and maintenance is already
in place. While, the Voluntary Retirement Scheme would reduce
the salary burden, debt servicing will also come down in future
once additional revenue mobilisation pre-empts the need for
large borrowings.
50. In the Budget of 2000-01 our primary concern has been
to focus on continuing works and take up new works which are
absolutely essential. In this regard outlays under Public
Works and Irrigation have appropriated a large chunk of resources.
Under Public Works, among other things, the focus has been
on Water supply works for which a loan of around Rs.48.00
crore will be negotiated with HUDCO. Opa and Assnora water
works shall be accorded the highest priority thereby meeting
the water supply needs of Ponda, Panaji and Bardez including
Porvorim. Consequent upon the constitution of the Tillari
Irrigation Corporation, a substantial outlay has been earmarked
for Tillari project to the extent of around Rs.75.00 crore.
This outlay amounts to a part payment of the share of the
cost of project that Goa owes to Maharashtra. While around
Rs.50.00 crore will be made available by Government of India
under Accelerated Irrigation Benefit Programme, the remaining
Rs.25.00 crore will be raised through bonds by the Corporation.
51. A substantial outlay under non- plan is earmarked for
Education. This outlay, which at present, stands in excess
of Rs.200.00 crore comprises largely of salary grants to aided
institutions. With negligible fees, education sector accounts
for the bulk of government subsidies. My government will seek
a constructive debate on this subsidy element in order to
reduce its quantum as well as ensuring its better targeting.
As of now, we are actively considering an enhancement in college
fees as a first step towards corrective measures.
52. Outlay on health services is close to Rs.60.00 core in
the budget of 2000-01. This outlay, along with the outlay
on education, underscores my government's commitment to sustain
the human resource development in the state.
53. My government also desires to improve efficiency is administration
and governance. In this regard, I propose to start a new scheme
'Computerisation of Government Departments' with the singular
purpose of improving efficiency and speed in administration
and governance of public at large. It is envisaged that such
improvement could be brought about by providing software development
and training assistance to Government departments after detailed
assessment of their functioning and mode of operation. One
major fall out of this will be a comprehensive monitoring
of receipts and disbursements of Government, which would facilitate
accurate budgeting and timely policy responses to any unanticipated
changes in financial flows.
Conclusion:
54. Sir, may I take this opportunity to reiterate that my
government stands committed to deliver the best to the people
of the State. Transparent governance and quick deliverance
are our motto and we would leave no stone unturned to achieve
this end. My government has already made a beginning and I
seek whole-hearted assistance from my esteemed colleagues
and people of the State to see it through. Hon'ble Mr. Speaker
sir, as I come to the conclusion of my budget proposals I
wish to share with you, and through you with this august House
and the people of Goa some of my inner thoughts. Sir, I have
a dream for my Goa, your Goa, and our Goa. Realisation of
this dream will take a while- the things I want to begin now
will take time before they reach fruition. I will have to
depend on the cooperation and assistance of all to realise
this dream in the interest of all of us- in the interest of
the whole of Goa. As I say this, I am reminded of the lines
of Robert Frost: The woods are lovely, dark and deep but I
have promises to keep and miles to go before I sleepAnd miles
to go before I sleep…..
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