Goa govt bans recruitment, fresh capital expenditure in a bid to save cash

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Goa chief minister Pramod Sawant has announced a raft of austerity measures and has banned fresh recruitment, foreign and domestic tours in government departments and in state-funded autonomous bodies until December because of the economic impact triggered by the raging coronavirus disease (Covid-19) outbreak.

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The state cabinet has decided to defer sanction of capital expenditures except those that are partly or fully funded by the Central government and to put off project-specific borrowing for all government departments, autonomous bodies, state-owned public sector undertakings (PSU) and local bodies till December.

The austerity drive includes a compulsory economy class travel for all state ministers and bureaucrats, a ban on the hiring of vehicles for government use and on the purchase of new furniture, office equipment, etc.

CM Sawant said an exception to these measures could only be made subject to his prior approval.

The state government is facing an acute fund crunch owing to around 80% of the revenue shortfall, which had kicked in even before the Covid-19 outbreak. The shortfall is being attributed to a dip in Goods & Services Tax (GST) collections, which have consistently failed to meet their targets since the new tax regime was rolled out from July 1, 2017.

Though the Goa government has already hiked excise duty on liquor by 50%, sales have fallen appreciably because the tourism and hospitality sectors have been hit hard by the nationwide lockdown restrictions, which were enforced from March 25 to contain the spread of the Covid-19 outbreak.

VAT on petrol and diesel has been increased by 25% and 22%, respectively, during the lockdown to tide over the ballooning revenue shortfall.

The state ministers and lawmakers have announced that they would take a 30% cut in their monthly salaries till March 31, 2021, to tide over the revenue shortfall, and the excess funds accrued will be donated to the Chief Minister’s Relief Fund.

The House Building Advance Scheme for lawmakers and state government employees also has been cancelled. Those employees, who have availed of the scheme, have been directed to pay the existing bank rate of interest after the state government withdrew the subsidy of 2% interest on house building loans.

Though distressed government employees have approached Goa governor Satya Pal Malik, citing their inability to pay the interest on house building loans at the prevailing market rate, CM Sawant has refused to relent.

“A higher rate of interest is a small price to pay during a pandemic. This is only an issue of the rate of interest. But many people have lost their jobs, or have suffered pay cuts. We’ve to think about these hapless people as well,” the CM said.

The state government will also constitute a committee, which will propose additional measures to curb expenses.

The panel is expected to submit its report within a few weeks.

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