COMMENTARY
INTERVIEWS
SPECIALS
CHAT
ARCHIVES

Centre agrees to lend Rs 1.5 b to cash-starved Goa

Sandesh Prabhudesai in Panaji

The Union finance ministry has agreed to extend a special loan of Rs 1.5 billion to Goa for resuming work on ongoing power, road and water supply projects, stalled due to paucity of funds, according to Chief Minister Luizinho Faleiro.

Faleiro said in New Delhi today after meeting Finance Minister Yashwant Sinha yesterday that the latter had asked the Planning Commission to meet the state's demand for the loan.

Earlier, the finance ministry had turned down the request of then chief minister Wilfred de Souza for a one-time grant of Rs 1.5 billion for the same purpose.

Faleiro also called on Prime Minister Ayal Bihari Vajpayee, Home Minister Lal Kishenchand Advani, Power Minister P R Kumaramangalam and Steel and Mines Minister Navin Patnaik during his two-day stay in New Delhi and took up with them various problems faced by the state.

Instead of commending Goa for the low population growth, the Centre is penalising the state under the Gadgil formula which had recommended allocation of Central resources to states on the basis of the size of population, the chief minister said.

As a result, central funds to the state had gone down from Rs 1.20 billion to Rs 410 million, he said.

Faleiro said he had sought the Centre's permission to levy cess on mines in the state whose annual iron ore export was worth Rs 10 billion, accounting for 60 per cent of the overall export of the country.

The state was at present getting a royalty of Rs 9 per tonne of iron ore from the Centre which was just one per cent, he explained.

The cess collected from the mines would be utilised for upgradation of environment affected by the mining activity, he said.

The state proposed to take up a Rs 11 billion water resources project and a Rs 2.5 billion environment upgradation project.

The Goa government was setting up an information technology authority which would provide a single window system for it projects, he said.

Earlier, in Panaji, there was talk that the newly formed Congress government in Goa may not last long if the Bharatiya Janata Party-led coalition government at the Centre does not grant funds for the tourist state.

The state Congress unit had feared that the BJP's central leaders may not push ahead the proposal of granting a loan since the Congress had pulled down the BJP-backed coalition government of Dr de Souza in the state.

''Our financial situation is quite bad,'' said Deputy Chief Minister Dayanand Narvekar, who now handles finance portfolio in the new government. As Dr de Souza's planning minister, he had earlier threatened the prime minister with a state-wide agitation, alleging that Goa was being treated as a colony of Delhi.

Sticking to the same arguments Narvekar had made in the previous government, Faleiro has also urged the Centre to increase its share in the mining royalty from Rs 90 million to Rs 260 million as Goa contributes over Rs 1 billion to the Centre towards royalty alone.

Instead of fully depending on Central assistance, the Congress government had also sought a loan of Rs 200 million from the Goa State Co-operative Bank, while concentrating on strengthening the revenue generation methods.

Pointing out that Goa loses around Rs 200 million annually due to evasion of sales tax and excise duties, Narvekar now plans to raise at least Rs 50 million in three months by tightening the revenue collection machinery.

The new government has come to power through defections and is surviving with a majority of only one in the 40-member House.

Additional reportage: UNI

Business News

Goa