Entry tax & hike in petrol prices on anvil

| 19 March 2000 17:49 IST

Goa is seriously considering introduction of 'entry tax' on import as well as export of all the goods while giving local sales tax relief on the products sold in the tourist state, in order to mop up revenue and improve state's financial health.

To overcome the unimaginable deficit the state has run into in last one year, the coalition government led by Francisco Sardinha is also relying upon the new uniform tax policy rather than adopting special measures for the additional resource mobilisation, including hike in petroleum prices.

"It would be the most people-friendly budget", claims chief minister Sardinha, who however also admits that Goa's financial health is quite in a bad shape. He would be presenting the annual budget in the Assembly session, beginning from Monday.

The state usually projects annual deficit of around Rs 30 crore, which is expected to be covered this time with the additional share of around Rs 35 crore Goa would receive from central taxes, reveal highly placed sources in the government.

But it does not solve the problem since Sardinha has to also mobilise resources to pay back the short term loans of total Rs 52 crore within three months, taken from the state-run corporations – the Economic Development Corporation and the Industrial Development Corporation.

Forget the deficit of the new financial year, but the last year's deficit of Rs 13 crore itself has swollen to Rs 50 crore while the RBI's overdraft limit of Rs 26 crore was also exceeded by the government in the bargain, touching the figure to Rs 50 crore.

The government was thus left with no other option than going for short term borrowings while the four-month old coalition government, also supported by the Bharatiya Janata Party, withdrew almost Rs 154 crore from the contingency fund, exceeding the limit of Rs 10 crore.

To overcome the crisis, the state went ahead with short term loans from both the state-run corporations in spite of the Industrial Development Bank of India, the member of the EDC board, objecting to such withdrawal.

The prime reason for the state running into cash crisis, claim the officials, is reducing the age of superannuation from 60 to 58 years which has cost the state to the tune of Rs 25 crore. The bandwagon of 55,000 government employees has always been pain in the neck for the state here as every 25th Goan is paid by the 13 lakh-strong state.

The government has thus now also announced a new VRS scheme for those who are left with five years of service, to be implemented from April. Sardinha expects savings of around Rs six crore behind every 1000 employees, provided they opt for it.

While implementation of the fifth pay commission recommendations and revision of pay scales of teachers has severely hit the state economy, huge bills of a mini private power plant – Rs 150 crore per annum at the rate of Rs five per unit – is another point of crisis. Till date, the state has paid Rs 70 crore for 40 MW of power, it is learnt.

In spite of being aware of unhealthy condition of Goan economy, the jumbo cabinet has taken up several out-of-budget developmental projects while also going ahead with the plans of purchasing new luxury cars for the ministers and proposed hike in their allowances.

The financial experts in the government have thus suggested to Sardinha government to introduce the 'entry tax' while also going ahead with the implementation of the uniform tax policy, expecting annual accrual of around Rs 60 crore. The working group on uniform tax policy has already submitted its recommendations in this regard.

The proposal of entry tax thus plans to fill the uncovered gaps, by imposing entry tax on all the products, but giving relief on sales tax on those sold in Goa. Neither the imported raw materials nor the finished products, which were taken out as a consignment, was levied any tax till date, disclose the authorities.

As Goa's 50 per cent sales tax revenue comes from all kind of petroleum products, the government is thus likely to agree to the proposal of charging 20 per cent floor rate for all the petroleum products except diesel, presently ranging between the tax structure of eight to 17 per cent.

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