Tuesday 11 December 2018

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Economy | Budget

Miscalculations on Mining pushes Goa into huge deficit of Rs 1000 crore!

 

Chief Minister Laxmikant Parsekar has an upheaval task of presenting his last budget before election since his last year’s budget, estimated as surplus, has actually dipped into a major deficit of almost Rs 1000 crore.

Was it a grave mistake on the part of the financial managers of Goa government to forecast huge revenue returns from the mining sector in the last year’s budget?

Because that is where all the estimates of Goa government have gone haywire, pushing a surplus budget into a deficit one.  

While projecting total revenue estimates to the tune of Rs 11,450 crore, Parsekar’s budget had estimated non-tax revenue from the mining sector, to the tune of Rs 743 crore.

But in reality, Goa could not accrue little more than Rs 120 crore from the mining sector.

His last year’s budget had estimated a surplus of Rs 478 crore.

In actuals, learnt reliably, it has today become a deficit budget of Rs 500 crore!

A total deficit of nearly Rs 1000 crore!!!

DREAM V/S REALITY

What did Parsekar and his Team Budget project last year from the mining sector?

DREAM: While central government cleared 22 mines, Parsekar had told last year that at least 10 to 12 mines would start by October.

REALITY: Not a single mine started actual extraction and export of fresh ore, except couple of mines like Sesa starting the preparations.

DREAM: Goa will get Rs 342 crore from e-auction, said Parsekar.

REALITY: Goa accrued little more than Rs 120 crore from e-auction.

DREAM: Goa will get Rs 400 crore from royalty.

REALITY: No royalty earned since there were no exports, except negligible amount of e-auctioned ore.

DREAM: If no mine starts, the deficit would be adjusted with the surplus of Rs 408 crore, which would still leave the surplus of Rs 8 crore.

REALITY: Neither the mines started nor the projected ore was e-auctioned, pushing the state into deficit.

MINING A BACKBONE?

While these figures were gathered from different sources including documents presented in the Assembly, what it shows is that the public treasury is pushed into a deficit after eating into the estimated surplus figure.

In simple it means our deficit is almost Rs 1000 crore, which includes the projected surplus of Rs 478 crore and the actual deficit of Rs 500 crore.

The major loss was due to wrong projection in the mining sector, which pushed us into minus position due to a loss of around Rs 620 crore (Rs 120+ crore revenue against the projected revenue of Rs 743 core from mining.)

According to information, Goa earned little more than Rs 120 crore from e-auction of ore against Rs 400 crore earned the previous year of 2014-15. A shortfall of almost Rs 222 crore than the projected figure of Rs 342 crore.

While not royalty on export could be collected since no ore was exported, the government treasury also could not be filled with stamp duty collection since there was no renewal of any mining lease.

Unlike this year, in spite of mines remaining shut, the state government had collected almost Rs 440 crore by renewing the leases in previous two years.

In this background, it needs to be seen what projections Parsekar would make this year when demand for Goa’s iron ore has dropped significantly while prices in the international market have also crashed.

Will the state gain in the election year by the centre totally exempting the export duty and slashing other state-level duties and fees almost by 95 per cent?

Will mining remain the backbone of Goan economy in terms of major revenue collection?

Well, these are the key questions Parsekar has to answer while presenting his election budget.





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Now blame others for your grave mistake Mr. U-turn.

 
Salvador , Mumbai

Economy

 

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