Why Manohar Parrikar’s absence has left Goa’s economy in doldrums
With a mining ban and fall in GST and excise duty collection, the state needs a leader who can take a call on important matters as and when they arise.
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Goa witnessed political uncertainty on a number of occasions in the 1990s when successive state governments survived for less than a year. Today, once again, the state is going through a phase of instability.
Goa is facing a deep economic and political crisis because chief minister Manohar Parrikar has been undergoing treatment for pancreatic cancer since February this year and governance has come to a virtual standstill.
Goa chief minister Manohar Parrikar has been diagnosed with pancreatic cancer. (Source: PTI)
The state’s economy is on the verge of collapse because of inordinate delays in taking decisions pertaining to its revival. As the bedridden chief minister is also in-charge of four major departments – home, finance, industry and education – the fortunes of the state are looking bleak.
The suspense over Parrikar’s health has led to chaos in the state. The problems facing Goa are turning into crises as there is no one to take a call on important matters.
The crisis at the government level was apparent when the Investment Promotion Board (IPB), a body which clears investment proposals in the state, announced on October 17 that it has cleared eight proposals of industries and hotels worth of Rs 200 crore. According to a local channel, one of the IPB members posted on his Facebook page that the proposals were cleared at a meeting held under IPB chairman Parrikar through video conferencing.
The Opposition Congress took a strong objection to the developments saying that Parrikar’s physical presence as well as signature was mandatory to clear the proposals. This means either no such meeting took place or Parrikar’s signature was forged to clear the proposals. Pushed on the back foot, the government had to clarify that only a discussion on the proposals was held and no decision has been taken.
That the state’s economy is in serious trouble is evident from the fact that its collection of Goods and Service Tax (GST) and excise duty have fallen by at least 20 per cent. The Finance Department has taken a decision to cut non-essential revenue expenditure of all departments by 25 per cent to make up for the shortfall in revenue.
The revenue shortfall is in sharp contrast to Parrikar’s estimate of Rs 144.65 crore revenue surplus when he presented the state’s budget of Rs 17,123.28 crore in February.
Parrikar had announced in the budget speech that the state’s focus in the current financial year will be on employment creation by providing a boost to the industries and the education sector. The ground situation, however, tells a different story. The state’s industry sector has been paralysed since Parrikar fell ill. He had initiated a process to take back 22 lakh sq m of land which was earmarked for different companies under the Special Economic Zone (SEZ) a decade ago. The process has been stalled since he went out of action.
With the Arabian Sea on one side, Goa faces a perennial land crunch. A decade ago, the state government had acquired 34 lakh sq m of land for the SEZ project, a concept which fell flat soon. The land has been lying vacant since.
In 2017, Parrikar said that the process to reacquire 22 lakh sq m land and hand it over to the Industrial Development Corporation (IDC) to build industrial estates will start soon. The IDC needs to shell out Rs 256 crore for the reacquisition. Sandip Bhandare, chairman of Goa Chamber of Commerce and Industries (GCCI), says Parrikar was the driving force behind the process. If he had been in action the reacquisition would have been completed by now. At present, there are 20 industrial estates in Goa. If the 22 lakh sq m of land available in Verna, Sancoale and Keri is made available, more industrial and commercial units could be set up subsequently leading to employment creation.
Poor power transmission has added to the problem of slow industrial growth. The state has ample electricity but as the transmission lines are faulty, it is facing power cuts across the state. As the power cabling has been damaged at several places, the state government is urging the investors to set up their own cabling.
As it is likely to increase the investment cost of the project, no investor has shown interest in the government’s proposal. Industrialists are paying Rs 8 per unit for the electricity supply, which is one of the highest rates in the country. An investment in power transmission lines would burden them further.
Goa power minister Nilesh Cabral, who took over the department’s reins three weeks ago after then minister Pandurang Madkaikar was removed because of his illness, admits that there are serious problems facing power transmission. He said he is going to use the PPP (public private partnership) model to improve the transmission network. He said that the situation will improve in six months.
Even though industrial growth was slow, Goa’s economy pulled through last year because the state earned at least Rs 1,000 crore as royalty and taxes from iron ore mining.
The Supreme Court has banned mining activities in Goa. (Source: Reuters)
However, since the Supreme Court banned mining, the state has lost that revenue. All political parties in the state are of the opinion that the Union government should come up with an ordinance to resume mining activities.
Parrikar had started a process in this regard. He had asked the law department to prepare an affidavit explaining how mining is legal and within the limits set up by the Supreme Court. The process has slowed down since there is no other influential politician from the state who can convince the Union government to go for an ordinance.
Town and planning minister Vijai Sardesai called on Union mining minister Suresh Prabhu on October 27 with a request to look into the matter as the ban on mining has affected lives of over two lakh people directly dependent on it. Prabhu was reportedly non committal.
Puti Gaonkar, chairman of Goa Mining People’s Front, points out that business in six of the 11 talukas has been severely affected because of the mining ban. The markets in Sattari, Sanguem, Quepem, Dharbandora, Bicholim, Ponda and Margao have been witnessing gloom since a couple of months.
Gaonkar claimed that his monthly turnover of Rs 50 lakh before the ban has come down to Rs 15 lakh. He is a dealer of a leading mobile phone manufacturing company.
Ambar Timblo, chairman of Goa Mineral Ore Exporters’ Association, blames the campaign against mining by certain NGOs for the SC ban. He believes that it is going to be extremely difficult to enter the market again.
India’s credibility as an exporter friendly trading country and investor confidence are at all time time low.
Out of the last 75 months (and counting) the mining industry in Goa has been permitted to operate only for a mere 10 months. That has put brakes on the state’s economy.
There is a need of a strong leadership in Goa to tackle the economic crisis.
The ruling BJP has failed in providing it.