Goa budget session kicked off

Goa chief minister Pratapsingh Rane will have to chart out a new path that is acceptable to the people of the state in the budget.

The budget session of the legislative assembly began from 11 August.

Owing to political turmoil in Goa, the state was brought under the President's Rule in March this year, and subsequently, the state's vote on account had been adopted in the Parliament till August.

As Rane, who also holds the finance portfolio prepares to present the Goa budget for the current truncated financial year, he will have to take some challenging decisions. On the political front, Rane is left with little choice, as he has to present a budget that meets the expectations of various constituencies, especially to please his coalition partners-the Nationalist Congress Party (NCP) and the Maharashtrawadi Gomantak Party (MGP).

Besides amending some of the legislations in the ensuing budget session of the Goa Legislative Assembly, the Congress-led government is also expected to bring new legislations. The government has also decided to reduce value-added tax (VAT) on Feni (local cashew wine) and Indian-Made Foreign Liquor (IMFL), to boost liquor sale in the state.

However, the chief minister has his share of problems in the form of the opposition, the Bharatiya Janata Party, which has made it clear that it will be more aggressive. Among his main concerns this session are:

With VAT being introduced in Goa from 1 April this year, Rane needs to take some tough measures to ensure that the State's economy doesn't derail, even though the government has reduced the tax rate to 4.5 per cent from 12.5 per cent.

MESSY FINANCES: A look into the state's finances, and one learns that it presents a very uncomfortable and unhealthy picture. The major disappointment was that the revenue earned from the sales-tax was also dropped this year.

BORROWINGS: Goa's borrowings are growing at an alarming rate, leading to a stage where, the state will have to pay huge interest. The state government is in the final stages of preparing a 'White Paper' pertaining to the financial status of Goa.

EXPECTATIONS: Business and industry expect the chief minister to lower taxes, remove restrictions and make tax-collection 'effective and efficient'. The government has little choice, but to increase tax-rates. Goa is one of the less-taxed states in the country.

TAXES: The Panaji-based Department of Commercial Taxes registered a 12 to 15 per cent growth over the previous year by mobilising Rs 691 crore as against Rs 600 crore the earlier year adding both, sales-tax and entry tax. It had set a target of Rs 730 crore this year.

On the other hand, entertainment tax, which in terms of total commercial tax collection was negligible, continued to show a decreasing trend on account of concessions doled out to theatres, by lowering entertainment tax rates.

During the last few years, by way of excise, nearly Rs 44 crore to Rs 48 crore was collected. Excise-collection, which was to the tune of around Rs 4 crore per month, had dropped by around Rs 2 crore per month for over a period of last seven months. This drop, is likely to create an imbalance on the revenue side.

Similarly, the state government collected Rs 33 crore as luxury tax from hotels last year. Of this, an amount of Rs 13 crore was collected as 'Arrears Settlement Scheme', implemented by the Manohar Parrikar-government. As there was no such scheme this year, there was likely to be a considerable drop in the luxury tax collection.

ATTRACTING INVESTMENTS: Last but not the least, Rane will have to ensure a stable government to attract investors.

A stable government would mean, a clear signal to entrepreneurs to set-up their establishments in Goa besides setting up state-of-the-art infrastructure, providing a good transport system and an excellent communication system.