PANAJI, March 5: The government of Goa has been lobbying with the Centre for the extension of tax-holiday status for the State by at least another five years. The five-year tax-holiday which was granted to Goa by the Narasimha Rao government comes to an end on March 31, this year.As part of its campaign for the recently concluded Lok Sabha elections, the ruling Congress Party had promised to influence the Centre regarding the extension of the tax-holiday status for the State. Its candidate and former chief minister Ravi Naik said this measure would go a long way in reducing unemployment in the State. "Goa has to be declared a backward state for another 10-15 years if industries are to develop here," Naik said soon after his victory at the husting.Officials in the Goa Industry Ministry however feel that investments will decline in the short-term if the tax-holiday status is withdrawn but eventually it would stabilise in the next two or three years. "Goa offers a number of attractions to potentialinvestors like a good climate, ports, convenient airports, etc," a well-placed official in the ministry told The Indian Express. However, the corporate sector is sceptical about the viability of the scheme without corresponding improvements in infrastructure. "There is a severe shortage of power and water supply which is a major disincentive to investors," notes a spokesman of the Goa Chamber of Commerce and Industry.The State government, however, felt that investments in infrastructure will increase as more players come into the market. "As demand for power goes up, more suppliers will come into the market," says Minister for Power Mouvin Godhinho who is in charge of overseeing implementation of several power projects in the State.The results of the tax-holiday scheme in the State has however been mixed. While the value of projects implemented in 1992-93, the year before the scheme, amounted to Rs 132.98 crore, it fell in the subsequent years. In 1993-94, projects worth Rs 37.63 crore wereimplemented in the tiny State. Investments rose to Rs 80.77 crore in the following year. The major investors in Goa consist of iron and steel, food productions, pharmaceuticals, shipping, plastics and jewellery.
