Decoding Goa economy: What is ailing the costal state amidst developing political crisis?

Unlike other Indian states, the economy and political administration of Goa has a peculiar nature. Carmen Sharmila Pais in the thesis submitted to Goa University in 2017 explains that it was Portugues who introduced election in Goa in the year 1821 and it continued till there exist in 1961. The thesis further explains that the colonial Goa had voted in the Parliament of Portugal and a section of Goa population were allowed in public administration; municipal, parochial, legislative or the government councils, the colonial council and the presidential elections of Portuguese dominion during the republican period. The 19th century witnessed the emergence of Goan elite questioned the Luso-descendant community of Portuguese Goa. The post-independent Goa continues to experience the political instability and subject to the elite interests.

Table 1: Governments, Chief Ministers and their tenure

Source: Goa Assembly

It is evident from the table that no government has completed its full term from 1993 to 2000. It was Manohar Parrikar from 2000 to 2005 who completed five years after Independence, after the Congress ruled the state from 2007 to 2012.  However, the economy of Goa is resilient enough to accommodate the political changes. It is possible because of tourism and mining that dominates the economy. These two sectors are primarily run by private capital which needs government support to operate.

About 10.2 percent of the population is engaged in tourism, and as per the Tourism Ministry of India, every Rs 1,00,00,00 invested in tourism generates 78 jobs. However, much of this investment is from the private sector. So every tourism-dependent economy has to have a flexible regulatory measure to attract more tourism even at the cost of the environment. The Goa government keeps a flexible tourism policy. Mining is the second biggest industry in the state.

Interestingly, the mining sector is growing at a higher rate compared to other sectors. The royalty collected by the Goa government from major minerals till 2017 was Rs 122.09 crore and minor minerals Rs 6.36 crore.

Here is the M B Shah Commission's report on illegal mining operations and huge extraction of resources.

See graph 1 which gives a brief outline of how the mining sector operates in the state and the number of people working in this sector.

The other economic sectors of the state is not performing on par with tourism and mining. An assessment of the performance of annual credit plan of the state gives glimpses the state government. (See Table 2)

Renewable energy, export credit and social infrastructure are least performing among all sectors. Among them social infrastructure deserve special attention since the dependency on private health is high in Goa, this has to contextually analyzed with the decreasing quality of environmental health in Goa.

The general unemployment rate of Goa shown an overall decreasing trend ( See graph 2). However as per the report on Fifth Annual Employment - Unemployment Survey 2015-15, the rural unemployment rate of Goa rose to 11.3 percent in 2013-14 to 15 percent in 2015-16.

Graph 2. General Unemployment rate of Goa

The emerging political crisis of Goa has to be assessed with reference to the economic status of the state. In Goa, the economic policy does not need any major revision. The economy of Goa is not growing at a higher rate, the year-on-year growth rate prove this.

See graph 3

Graph 3. Year-on-Year growth ratio of State GDP

Any sudden economic policy shift is not possible in this context. Also, the Opposition parties do not have any alternative agenda such as to regulate illegal mining, public investment on health care, increasing employment rate and responsible tourism, etc.

(The writer is Assistant Professor, Jamsetji Tata School of Disaster Studies, Tata Institute of Social Sciences)

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