Panaji, Feb 27 (IANS): Poor principles of home economics may have turned out to be the cornerstone of political economy in Goa.
Despite the state treasury strained under a debt of almost Rs 20,000 crore, political parties have announced a series of populist programs offering stipends, unsecured low interest loans and stipends for women and youths, in order to gain maximum traction among the state’s electorate. assembly polls held on February 14.
According to state finance ministry officials, the state’s current debt is pegged at around Rs 20,054 crore, with the major part represented by market loans of Rs 16,364 crore contracted by the government of the state.
The other major component of the debt are loans granted by the government to the National Bank for Agriculture and Rural Development (NABARD) to the tune of Rs 593.48 crore.
The share of central government loans in Goa comprises Rs 1,894 crore in the form of special securities issued to the National Small Savings Fund and central government loans and advances which are valued at Rs 1,172 crore.
Goa’s total debt is slightly lower than the total net fiscal expenditure of Rs 21,646 crore projected for the financial year 2021-2022 and nearly 22% of the state’s estimated gross domestic product, which has been pegged at Rs 89,421. crores of rupees.
While the government of Goa has recognized the seriousness of the debt burden on the public treasury, the outgoing regime led by Chief Minister Pramod Sawant, according to an official statement published here, has made efforts to restructure the borrowings which have been regularly contracted by the last several governments to carry out important infrastructure works as well as to meet other expenses.
“In order to maintain fiscal discipline, the government has targeted various loans which were previously incurred at high interest rates. Some loans, for example from GWMC (Goa Waste Management Corporation) amounting to Rs. were at high interest rates, as high as 13 percent. This needed to be reviewed,” the state government said in an official statement, stressing the importance of financial prudence.
“The government negotiated with various agencies from which the amount was taken and succeeded in lowering the interest rates to around 8%. In addition, some loans that were at high interest rates were either refinanced with low interest rate loans either prepaid with the excess amount from the government so as to effectively save Treasury outflows on such loans.Total loans worth more than Rs 500 crore have been restructured using the above methods,” the statement read.
Despite the debt burden and the state government’s efforts to cope with the soaring interest rate generated by outstanding loans, almost all political parties announced populist windfalls ahead of recent polls in the assembly.
While the AAP rookie promised free electricity, unemployment benefits to voters, the Trinamool Congress followed suit with unemployment benefits as well as financial allowances for women and low interest loans For the young. The BJP has already announced free water supply as well as three free gas cylinders per year, Congress has promised Rs 6,000 to economically backward families.
The gratuitous one-upmanship also sparked a battle between former Union Finance Minister P. Chidambaram and TMC’s Mahua Moitra, an investment banker who worked for JP Morgan Chase, over TMC’s announcement of an allowance of Rs 5,000 for each female head of household in Goa.
Chidambaram claimed the stipend would cost Rs 2,100 crore annually to the state finances, while Moitra claimed the stipend was doable as it was only 6-8% of the annual budget and would help inject cash in the economy.
Chidambaram himself says that the exploitation of the funds was not the problem facing debt-ridden Goa, adding that the problem lay in the allocation of the funds.
“The source of funds was never an issue, but the issue was with the allocation of funds,” Chidambaram said.