Kelkar Commends Goa for Implementing FRBM Act

The 13th Finance Commission held consultations with the Government of Goa today. Dr. Vijay L. Kelkar, Chairman and other Members, Dr. Indira Rajaraman and Prof. Atul Sarma, were present in the discussions with the Chief Minister of Goa. The 13th Finance Commission is on a two-day visit in the State as part of the consultations with the State Government and other key stake holders.

The Commission met the Hon’ble Chief Minister, Shri Digambar Kamat, Members of the Cabinet, Deputy Chairman of the State Planning Board and senior officials of the State Government. It also interacted with representatives of political parties, Panchayati Raj institutions, Urban local bodies and Trade and Industry Associations. The Commission will visit to Dr. Salim Ali Bird Sanctuary and Sanquelim Mines of Sesa Goa Limited, to have an insight into ecological development in the State. The Commission visited to Margao Municipal Council and Village Panchayat, Navelim and Davorlim-Dicarpale, Salcete to have an interaction with the local people and representatives of the Local bodies.

Before its visit to the State, the Commission held a meeting with Accountant General of Goa on Wednesday, the 18th June, 2008 in its office at New Delhi.

The Chief Minister, Shri Digambar Kamat pointed to Goa’s excellent fiscal performance as well as its high human development indicators. He noted that the power sector run departmentally was running efficiently and at a profit. Line losses were less than 20% making it a national leader. In the educational sector he described future plans to develop Goa as an educational hub as well as setting up of integrated school complexes. The Chief Minister however pointed out that as a small state Goa faced a number of difficulties which needed to be taken into account by the Finance Commission. These include:

a. Limited Resource generation capabilities which constrained its expenditure budget.

b. Difficulty in implementing some Central Government nation wide stipulations like corporotisation and unbundling of the power sector

c. Vulnerability of the state to tax exemption schemes for other states announced by the Government of India which resulted in flight of industries from Goa to the tax exempt states

The Chief Minister pleaded for adequate and timely support by highlighting the importance the Government of Goa lays on protecting the environment and the steps taken to improve it through new initiatives. The Chief Minister noted that Goa was a well performing state and should be incentivised by the Finance Commission to perform better. Presentations were also made by the Health , Mining , Information Technology and Education Departments on the progress and new initiatives in their respective sectors.

Shri Vijay Kelkar in his reply, Congratulated Goa for the improvements in revenue performance. He noted that the trend growth rate of Goa’s own revenue receipts was well above the national average for all States of 11.5 per cent for 1999-06 which indicates the good revenue efforts made by the State. He commended the State Government for its successful introduction and implementation of VAT which improved the own revenue performance of Goa on both buoyancy and revenue growth.

Making particular reference to the implementation of the State FRBM Act, Shri Kelkar complimented the State for a revenue surplus and a near zero primary deficit. Highlighting the issues emerging from the Memorandum presented to the Commission by the State Government including growth of revenue expenditure, management of the State’s debt liabilities and possibilities for improving the equity and efficiency of public expenditure, the Commission welcomed views from all stake holders on the appropriate design and structure of the proposed goods & service tax, the nature and content of further fiscal reform, the issue of horizontal equity between States.

The Commission will finalize its recommendations by October 2009 after completing its discussions with all the State Governments, the Government of India and relevant stake holders.

Source: Press Information Bureau
Date: June 27, 2008