Debt repayment can strain Goa's future budgets, CAG shows apprehension

The CAG has expressed apprehension that debt repayment can strain the Goa government's budgets in the future, and suggested that it work out a strategy to avoid a debt trap.

Much of the fresh debt was being used to repay earlier liabilities, it observed.

Chief Minister Pramod Sawant tabled the Comptroller and Auditor General's (CAG) report for 2017-18 in the Legislative Assembly on Friday.

As per the report, the state was liable to repay Rs 888 crore in 2018-19, Rs 1,676 crore in 2019-2020 and Rs 2,126 in 2021-22.

This may put a strain on the state's future budgets, it said.

The CAG also said that Rs 7,093.41 crore, which is 52.11 per cent of the total public debt, would be repayable within the next seven years.

"The state government would have to work out a well- thought out borrowing-repayment strategy to avoid falling into a debt trap," the CAG report stated.

It recommended that the state government consider developing a "debt sustainability framework".

From 2013 to 2018, 78 per cent to 92 per cent of public debt receipts were used for debt servicing, it noted.

"In 2017-18, the debt servicing out of public debt receipts was 89 per cent as against 92 per cent in 2016-17. Average expenditure on debt servicing during 2013-18 was Rs 1,321 crore, which accounted for 83 per cent of the average public debt receipts during the same period, implying that a larger percentage of debt was being used for debt servicing," it said.

An insignificant portion of the debt was available for meeting developmental expenditure to promote growth, it noted.