Faleiro takes major steps to mop up revenue

| 29 September 1999 11:45 IST

In an attempt to fill the empty coffers of Goa, the Luizinho Faleiro government today took major steps, including cutting down the 28-year old blanket sales tax holiday to the industries to half of its size.

All the industrial units, including the existing ones in the state, will have to pay now 50 per cent sales tax to the government, unlike blanket exemption in the past – 12 years for the medium and large units and 15 years for the small units.

Though the government has not worked out the additional revenue it would generate, the liquor industry itself would add Rs 20.85 crore annually, says Faleiro. Goa has altogether 53 distilleries, manufacturing 1.25 crore bulk litres of liquor every year.

"Industry has to bear the additional burden when the state economy is showing buoyancy", quipped the chief minister, claiming that his decision would not stop industries coming to the tourist state. "No other state is giving even this 50 per cent exemption", he claims.

Though the drastic steps taken by the cabinet today appears to be the post-budget exercise, it was pending for quite a long time as this year's budget was passed by the Parliament during the President's rule while the Lok Sabha elections had halted the process further.

In fact Faleiro had announced, during the budget session held in July, that he would have no other option than going for additional resource mobilisation, while also assuring the House to come out with a white paper on Goa's financial health.

But in the meanwhile, the actual deficit of Rs 13 crore for this financial year got swollen to Rs 98 crore, mainly because of the additional burden of the state-paid employees. By adjusting most of the amount of these payments in the provident fund, the actual figures of the deficit are now brought down to Rs 28 crore.

The additional burden includes supplementary demands of Rs 19 crore passed during the monsoon session, Rs 16 crore towards payment of college teachers as per the UGC scales, Rs 33 crore of two instalments of the dearness allowances as well Rs 17 crore as the result of the government decision to reduce the retirement age to 58 years.

While provision for the college teachers and DA was made in the budget earlier, Rs 11 crore have been deposited in the provident fund. The revenue collection of additional Rs 10 crore due to economy boom also helped the state further.

Besides this, the government has also hiked water tariff, sparing domestic consumer and defence establishment, but generating total revenue of Rs 48.13 crore. But it still leaves a shortfall of Rs 7.33 crore to the total water supply cost of Rs 55.86 crore.

The water hike has however affected almost all business establishments including small hotels to five star ones as well as all kind of industries and commercial ventures, categorising the hike as per the amount of water consumption.

In order to bring back the old profit-making glory of the electricity department, the cabinet has also approved compulsory billing of 65 per cent of the installed capacity of power to all kind of power guzzlers. It would bring in Rs 26.4 crore of revenue, in addition to annual income of Rs 19.2 crore.

Though this would mean additional monthly income of around Rs 2.2 crore to the electricity accounts, Faleiro is yet to apply his skills to counter the threat of huge payments to be made to purchase the privately generated power. The first bill submitted by Reliance Salgaocar Pvt Ltd has crossed Rs four crore.

Liquor industry has also not been spared by the Congress, though rationalisation of excise duties here may not bring in large amount of revenue. Duties of locally manufactured IMFL have been hiked from Rs 30 to Rs 35 per proof litre while it is slashed for the imported IMFL by Rs five, charging on par with local manufacturers.

The imported liquor would still be costly in Goa as the government has introduced a new fee, called the import pass fee, of Rs 10 on every bulk or proof litre of the beer or the IMFL. In addition, the annual licence fee has also been revised from Rs 50 to Rs 2000, adding around Rs one lakh annually to the coffers.

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