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CAG fears that Goa may head towards debt trap

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Panaji: Projecting that the debt repayment would strain the Goa government’s Budgets in future, the CAG has suggested that it (government) would have to work out a well-thought out borrowing-repayment strategy to avoid falling into a debt trap.

The Comptroller Auditor General (CAG) 2017-18 report was tabled on Friday on the floor of the House during Budget session of the assembly.

“The maturity profile of the state debt indicates that the liability of the state to repay the debt during the periods 2018-19, 2019-2020 and 2021-22 would be Rs 888 crore, Rs 1,676 crore and Rs 2,126 crore respectively, which may put a strain on the government budget during that period,” the CAG has pointed out.

The auditors have also said that Rs 7,093.41 crore which is 52.11 per cent of the total public debt would be repayable within the next seven years.

“Therefore, the state government would have to work out a well-thought out borrowing-repayment strategy to avoid falling into a debt trap,” the CAG has report reads.

The CAG has recommended that the state government may consider developing a debt sustainability framework for achieving improved long-term sustainability in fiscal deficit management and to guide the borrowing decisions of the state in a way that matches their financial needs with current and perspective repayment.

 Auditing figures of the borrowings, the CAG said that during 2013-18, 78 per cent to 92 per cent of the public debt receipts were used for debt servicing.

“In 2017-18, the debt servicing out of public debt receipts was 89 per cent as against 92 per cent in 2016-17. This, the average expenditure on debt servicing during 2013-18 was Rs 1,321 crore which accounted for 83 per cent of the average public debt receipts during the same period, implying that a larger percentage o debt was being used for debt servicing,” it has said.

CAG has revealed that “a very insignificant portion of the debt was available for meeting developmental expenditure to promote growth.”

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