Giving a setback to the government’s ambition of making the Indian economy 5 trillion USD by 2024-25, advance forecast released by the National Statistical Office (NSO) indicates that the economy is projected to grow five per cent in the current year 2019-20. It is the slowest growth rate in the GDP since 2008-09, which was the year of the global financial crisis. The GDP growth rate in 2018-19 was 6.8 per cent and 7.2 per cent during the year before, 2017-18.
According to projections by India Ratings and Research, Goa is likely to witness the steepest contraction in the economy in 2020-21, followed by Gujarat. The agency expects the gross state domestic product (GSDP) of all states in India to contract in FY21, which witnessed lockdown since March 25, eased in phases from the middle of April. The contraction will be in the range of 1.4-14.3%.
The outburst of Covid-19 cases worldwide further aggravated the dire economic condition which has resulted in sharp decline in tourist footfalls in the state of Goa which already had a low income due to mining ban in the state, thereby deepening the financial crisis in the state and thus aggravating further the miseries of Goans who were depending on tourism and mining for sustenance of their basic needs.
Goa has two major job providing sectors: one is mining which has been stopped from last two years resulting into three lakh livelihood losses in the state and another is tourism. With the Covid-19 outbreak across the world, tourism in Goa has also dropped to a great extent and the tourist footfalls are likely to dwindle down further to a trickle.
According to Goa Mineral Ore Exporters Association (GMOEA), an industry body dedicated to promoting, supporting, protecting and increasing Goa’s mineral export trade, the Covid-19 pandemic has further worsened the economic and employment situation of Goa because of sudden drop in tourists arrivals.
The contraction in tourism will lead to additional losses for the state and will increase unemployment to the tune of almost 75,000 jobs. Moreover, the state is also witnessing closures of several industries due to the extent of the pandemic.
Furthermore the state debt of Goa has reached dangerous levels of over Rs 20,000 crore as per recent state budget figures. This sharp increase in debt levels can be attributed to shutdown of mining activities which has led to revenue loss of Rs 7,000 crore in the last 2 years.
The state government during the budget 2019-19 estimated the state GDP at Rs 84,888.9 crore. According to the Economic Survey, the gross state domestic Product (GSDP) of Goa showed a 12.14 percent growth during 2017-18 when compared to the previous fiscal. The report stated that the GSDP, at current prices for the year 2017-18 was estimated at Rs 70,267 crore as against Rs 62,660 crore in the year 2016-17, thereby registering a growth of 12.14 percent.
To revive the Indian economy the finance minister, Nirmala Sithraman has initiated several measures including a sharp cut in corporate tax rate, support for stalled housing projects and Rs 102 lakh crore plan for infrastructure. More boosters are expected in Union Budget 2020-21.
In Goa, however local industries are calling for single window clearance for projects, quick construction of the IT Hub and the electronic city in Tuem. In order to improve the stability of the state economy, the state government needs to complete projects that have been announced over the years, but still have not been implemented into action.
According to insiders, unlike last year, there is a chance that mining operations could start sometime during the course of the next fiscal, but like last year, the spectre of the COVID pandemic still hangs over the economy and this could ultimately wipe out all estimates and forecasts made by any government.