By Prof D M Deshpande
Goa’s Chief Minister, who also holds the finance portfolio, unveiled his 7th budget for 2026–27. Though it cannot be said to be a precursor to the state polls next year, sops to vital groups and communities have nevertheless been kept in mind. The redeeming and continuing feature of the budget is that it lays down a complete and comprehensive financial plan for the state. The budget speech of Dr Sawant started with the global geopolitical disturbances that could have a significant impact on the state economy.
The state depends rather heavily on the service sector led by the hospitality industry. However, the secondary sector, which was not considered a front runner in the state, has quietly overtaken the tertiary sector in Goa. It comprises manufacturing, construction, utilities and electricity. The secondary sector has shown a robust growth of 12.6%, contributing 50.76% to the state GDP in 2024–25. On the other hand, the tertiary sector’s share in GDP for the same period was 43.5%; it registered a growth of a little over 11%.
Hence, in the fitness of things, the CM has focused on industry in Goa. The renaming of the Directorate of Industries, Trade and Commerce as the Directorate of SMSEs, Industries, Trade and Commerce should not be seen merely as semantic. It implies a strategic shift in policy — a change that keeps in mind the interests of the state, people and the economy. Being a small state with limited land availability, large projects are eminently unsuitable. Not surprisingly, several of them are stuck in litigation, causing cost overruns. Empirical studies show that, when compared with SMSEs, they do not generate adequate employment. Yet, they involve huge capital costs. Studies also point out that their contribution to GDP and exports is not on par with that of SMSEs.
The budget allocates Rs 385 crores to the tourism department, an increase of 10% over the previous year. Perhaps the industry association expected a higher allocation for two reasons: one, to mitigate the risks emanating from the devastating multi-nation military conflict in the Middle East; and two, the sector has shown a marked improvement and, considering its potential, it deserved a better reward. In 2025, a total of 189 chartered flights came to Goa carrying 40,339 international tourists. While the total number of foreign tourists was 5.17 lakh, domestic tourist numbers were 1.02 crores. The CM has reiterated that both airports will continue to function, which will remove unnecessary rumours and confusion on the matter.
As competition intensifies in the tourism industry, it is imperative to improve tourism infrastructure and visitor experience. Keeping this in mind, and to develop a sustainable tourism sector, the Goa government is seeking a Rs 500 crore fund under the Centre’s Destination Management Scheme. This will strengthen efforts to project Goa as a destination for wellness tourism, with Ayurveda and Yoga as a policy vision. The problem is that it makes state tourism dependent on funding by the Centre at a time when the Government of India too is facing grave economic challenges due to the ongoing war in the Gulf. Two positive points from the budget need special mention. One is the proposal to request the Centre to establish a National Institute of Hospitality, and the second is the training of 10,000 tourist guides in a 12-week hybrid certification programme in Goa in collaboration with IIMs. The second initiative was announced in the Union Budget and aligns well with the needs of a premium tourism state. Not only will the supply of the right type of skilled workforce be augmented, it will also go a long way in enriching visitors’ experience.
Education receives a significant allocation of Rs 3,400 crores. Some of this will go towards housing six government colleges in one complex — Mahavidyalaya Sankul — which is a capital investment. The establishment of a central technology business incubation hub at GEC is a welcome move in the context of Goa gaining recognition as a place for innovation and startups. It will act as a state apex body for incubation. The other colleges incubating here will create a good network where the ecosystem will provide better research, learning and outcomes. This, of course, needs proper coordination to bring the fruits of cohesion.
There is also an announcement that work on Mathgram Vidya Sankul at Davorlim will begin this year. The objective, as stated by the CM, is to provide world-class education, for which permissions to three private players have been given. However, it is not clear how the tricky issue of fees (possibly donations too) and admissions will be resolved. These institutions will be using public land, buildings and other resources. In Goa, public and private aided educational institutions are doing a phenomenal job. Perhaps they could have been given the thrust and the policy boost.
The government proposes to fill 2,500 posts in various departments through the Staff Selection Commission. The Commission has already recommended 1,100 candidates after conducting competitive exams. Goa already has one of the highest proportions of government employees to population. With the 8th Pay Commission award in the offing, this is bound to put pressure on public finances. A better way of creating sustainable jobs is by encouraging investment and creating a conducive atmosphere for private firms to flourish. Incidentally, there is no mention of the 8th Pay Commission in the state’s budget.
The economy of Goa has been resilient and it has the capacity to absorb temporary shocks such as war in the Gulf. Mining is looking up and can fill the void or the contingency of a fall in tourist arrivals. The CM’s assurance, “bhivpache garaj na”, is comforting; yet the government needs to keep a vigil on external developments and their impact on energy prices, inflation and remittances.
(The author is an independent scholar and former University Vice Chancellor.)
