Panaji: Chief Minister, Dr. Pramod Sawant has been prudently managing, strengthening and overseeing the State finances by regularly holding meeting with officials of Finance Department and other line departments, deliberating on measures to augment revenue receipts, reducing liability and curtailing wasteful expenditure.
The Government has also adopted other measures to manage and strengthen its finances – adopting of the TReDS (Trade Receivables Discounting System) mechanism, availing assistance from available Central Sector Schemes and Centrally sponsored schemes, undertaking activities under CSR, borrowings through different sources at lower interest rates etc.
The State of Goa is the first State Government in the country to adopt the TReDS (Trade Receivables Discounting System) mechanism for facilitating of payment to MSME contractors through the Receivables Exchange of India Limited (RXIL) platform. Through this system, till date, the Government has paid more than 480 bills received upto September 2020, worth more than 410 crores within a short span of four months and is still effecting payments through this system. All the major works department viz. PWD, Electricity and WRD and Corporations viz. GSIDC, GTDC, SAG and GWMC which undertake infrastructure development works were covered under this exercise. Government also held several discussions with various Banks to use this platform and facilitate payment to agencies. The quick support provided by Bank of Maharashtra in this regard needs to be appreciated. This mechanism allowed immediate liquidity support to all MSME agencies whose dues were pending for quite long time. This financial support to the agencies for capital works has increased the pace of various developmental activities in the State, despite the shadow of pandemic. A similar mechanism is also adopted for non-MSME agencies of some select Corporations. Not a single penny of interest was borne by the Government while clearing these outstanding dues of developmental works, thus benefiting the State exchequer.
Borrowings through different sources is the means to fund the deficit and carry out infrastructural activities. Every Government does the same to fund capital works. Government of India sets the Net Borrowing Ceiling limit on borrowings of the State Government under Article 293(3) of Constitution of India. Every State can borrow only within this ceiling limit. Goa’s major sources are the State Development Loans (SDLs) and loans from NABARD.
In the financial year 2020-21, the Central Government, due to COVID-19 pandemic, allowed States to borrow additional 2% of GSDP. Out of this 2%, 1% was unconditional and remaining 1% was conditional based on carrying out of four reforms within the set deadlines by Central Government. These four reforms were One Nation One Ration Card implementation, Ease of Doing Business reforms, Urban Local Body reforms and Power Sector reforms. The Government has fully achieved three reforms pertaining to One Nation One Ration Card, Ease of Doing Business and Urban Local Bodies and the reform pertaining to Power Sector has been achieved partially. This made the State of Goa eligible to an additional limit of 1.95% of GSDP i.e approx. Rs. 1800 crores, thus making Goa eligible for a net borrowing of Rs. 4530 crores from initial limit of Rs. 2677 crores. This additional limit has helped to facilitate payments to the various agencies undertaking works and providing services to the Government, giving them the much needed relief during this pandemic.
The State of Goa was able to avail special assistance to the tune of Rs. 97.66 crores from Central Government due to achievement of the above reforms under the scheme “Assistance to States for Capital Expenditure” which was used for Super Speciality Block, Irrigation and Sewerage projects.
As regards to borrowing from NABARD, the rural infrastructure development loans (RIDF) bear a low interest rate (currently 2.75%) as compared to SDLs. The Government has rightly focused on development of rural infrastructure and Goa was able to fully avail the set limit of Rs. 250 crore from NABARD for the year 2020-21 as against previous years’ drawal of Rs. 53.79 crores. This boosted the infrastructural development in sectors of sewerage, water supply, health and roads in rural areas. The limit to avail assistance from NABARD has been increased to Rs. 350 crores in this financial year. By coordinating with NABARD, the limits of sanction have been increased to the State of Goa.
In order to maintain fiscal discipline, Government has targeted various loans which were taken earlier at high interest rates. Some loans, for example of GWMC amounting to Rs. 72 crores, were at high interest rates, as high as at 13%. This required to be revisited. The Government negotiated with various agencies from whom the amount had been availed and has successfully got the interest rates reduced to around 8%. Further some loans which were at high interest rates have either been refinanced with lower interest loans or prepaid with the surplus amount of the Government so as to effectively save the outflow from the exchequer on these loans. Total loans worth more than Rs. 500 crores were restructured using above methods.
Government supports its various organizations through grants which the organizations can use for various purposes. It was observed that certain organizations had kept the money idle lying with them over the years, thus not fulfilling any purpose. All such accounts totaling to approximately Rs. 200 crores were identified and it was ensured that this amount was used for fruitful purposes. The Corporations were also directed to spend these unutilized amounts for the welfare of the public through their activities.
The Government, for the first time also set up the “Goa CSR Authority”, under Rule 4(2)(b) of the Companies (Corporate Social Responsibility) Rules. The purpose of this Authority is to mobilize the CSR contributions from various companies and channelize the same with the sectoral priorities of the Government. The authority has received CSR contributions from various Companies. An appeal is also made to all companies to generously contribute to this authority for the various welfare activities undertaken the Government.
Government also actively coordinated with Central Government to avail assistance from available Central Sector Schemes and Centrally sponsored schemes. There were various schemes of Government of India which the State had availed but the fund flow was blocked due to non-submission of Utilization Certificates apart from other necessary compliances. The status was reviewed with each department and the fund flow was streamlined by submitting compliance to the requirements of Government of India, thereby utilising the funds under various schemes lying unutilized over the years for their designated purposes. The percentage of funds utilized over the funds released has improved drastically to more than 96% as against 51% some years back. Further, many proposals have been referred to Central Government under other schemes, which is being pursued actively with Central Government for sanction.
