Goa granted a debt waiver for Rs 32 cr

Panaji, Jan 30 (UNI) The Finance Ministry has granted a debt waiver of Rs 32 crore to the Goa government on Central loans for 2006-07.

The State was considered eligible for debt consolidation and relief as per recommendations of 12th Finance Commission, consequent to the enactment of Goa State Fiscal Responsibility and Budget Management Act, 2006.

The objective of the Act is to ensure fiscal stability and sustainability through progressive elimination of revenue deficit and planned reduction of fiscal deficit and prudent and sustainable debt management of the State, an official release isssued here today said.

The Act targets to achieve revenue deficit of zero per cent and ratio of gross fiscal deficit to GSDP to 3 percent by March 31, 2009.

It brings in a greater trasparancy of the fiscal operation of the government.

The enactment of FRBM Act was a prerequisite as per the TFC recommednations for grant of debt consolidation and relief.

The Central loan oustanding as on April 1, 2005 is to be consolidated and rescheduled for 20 years at interest rate of 7.5 per cent. After consolidation and reschedulement, the repayment of the Central loan upt to 2009-10 will be waived.

The quantum of write-off will depend on fiscal performance of the State. the state of Goa has been granted debty waiver on repayment of Central loans for the year 2006-07 for total amount of Rs 32 crore s per the decision of the Central Monitoring Committee, the release said.

The debt waiver is the result of prudent fiscal reform undertaken by the government and a pro- active debt management policy pursued by debt Management Unit of Finanace Department. The department is in the process of finalizing the State medium term fiscal plan in consultation with National Institute of Public Finanace and Policy.

Goa expects to receive a total debt relief of about Rs 200-250 crores from the Centre in a span of 3 to 4 years, the release added.

UNI