Goa Chief Minister Manohar Parrikar will have to walk a tight rope while presenting the state budget on March 5 in the Assembly as the state's finances are hit by closure of the mining industry.
The state will have to forego almost Rs 1,000 crore, the revenue collected in the form of royalty on iron ore exports from the state. The government was banking on this amount to implement various development schemes.
The Supreme Court had banned mining in Goa in September, 2012, bringing to a halt the industry which was the biggest revenue earner for the state coffers.
Parrikar, who had to announce populist schemes like Ladli Lakshmi, providing Rs one lakh to a girl of marriageable age for her education or marriage, and Rs 1,000 per month to housewives, would have to resort to additional resource mobilisation to collect the revenue.
The Chief Minister also holds the portfolio of Finance.
As the mining industry remains in dire straits, the state government has been burdened with an additional liability of funding schemes introduced for the welfare of people affected by the mining closure.
The state is already providing a monthly compensation to truck operators and those who lost their jobs due to the ban on iron ore exports.
With additional resource mobilisation looking a tough task, the budget 2014-15 is expected to expand the scope of financial schemes provided for mining dependent people.
The state government has decided to step in to give relief to people whose loan liabilities are touching around Rs 1,000 crore, including Rs 900 crore of principle amount.
New schemes to help clear debts of people affected by the mining closure are likely in budget 2014-15.
The Goa Chamber of Commerce and Industry (GCCI) in its pre-budget memorandum had appealed to the government to make efforts to restart legal mining at the earliest.
It also suggested supporting the people affected by the ban on mining and creating alternative job opportunities, particularly in rural areas affected by the mining curb.
Parrikar has to balance between expenditure and development. This is the third budget of his government.