Panaji: The State Cabinet on Wednesday approved the Goa Fiscal Responsibility and Fiscal Management (Amendment) Bill, 2022, which aims to increase government borrowing by 1% of government gross domestic product (GDP) for the 2022-2023 fiscal year. The 1% increase will allow the state to borrow up to 4% of GDP.
The bill will be introduced in the monsoon session of the state assembly.
The state GSDP is around Rs 90,000 crore.
With this amendment, the state government can borrow a maximum of Rs 3,600 crore.
In the financial year 2021-2022, the state government borrowed about Rs 2,700 crore in the open market. The borrowing limit was around Rs 3,200 crore.
According to the Union Ministry of Finance, the state can carry over unused borrowing to the next financial year.
“On the recommendation of the Fifteenth Finance Commission, the Government of India, Ministry of Finance, has set the normal net government borrowing ceiling at 4% of GSDP for the financial year 2022-23, including a borrowing of 3 .5% of the GSDP is unconditional and a borrowing cap of 0.5% of GDP is permitted for certain performance criteria subject to an amendment to the State Fiscal Responsibility and Management Act. as such, the Bill seeks to amend Section 5 of the Goa Fiscal Responsibility and Fiscal Management Act 2006 (Goa Act 12 of 2006) to increase the borrowing limit allowed by the government Indian,” the bill says.
The bill further states that in accordance with the Goa Fiscal Responsibility and Fiscal Management Act 2006, Goa was permitted to borrow 3% from the GSDP, however, after the amendment of the said act, an area of additional borrowing of 1% (in total 4%) will be made available to the State for the financial year 2022-23 for development activities.
In the financial year 2020-2021, the state government borrowed around Rs 3,300 crore on the open market, while the borrowing limit was around Rs 4,500 crore. During the period 2020-2021, the Union Government authorized 5% borrowing on the GSDP due to the Covid outbreak.