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In the red, Goa EDC hopes to turn the tide
By A Staff Reporter
After incurring a loss of aro-und Rs 24 crore in the last three years, Goa EDC Ltd, the financial and investment arm of the state government, is working towards a formidable solution to break even this year. The reason for its financial woes is attributed to the NPA syndrome. The NPAs of the corporation are high and need to be significantly reduced. As P.F.X. D'lima, Chairman, Goa EDC Ltd avers, "The cost of funds sourced by EDC was high due to a number of factors and the main focus of our action is to lower this cost of funds so that we can make loans available to applicants at a cost that is not more expensive than funds available from banks. This focus also includes action on recoveries of post dues and the reduction of the corporation's NPAs." IDBI, the shareholder of EDC, has recently conducted a study and recommended that EDC take up other fee-based activities to enhance its income utilising the existing workforce. Action will be taken as soon as the report is finalised and approved.
To give a boost to small projects and reduce unemployment by encouraging self-employment, the state government has chosen the chief minister's Rojgar Yogna as a tool to accomplish this mission. In this scheme, loans up to Rs 4 lakh at 8 per cent interest rate with matching equity contribution would be extended for genuine projects. The Goa government, through equity in EDC, is providing the funds for this scheme.
With the national economy experiencing an upturn, industrial growth in the state has been fueled mainly due to exceptional Chinese demand for iron ore. Major investments in the recent past took place in this area.
EDC is also hoping to benefit from the BPO boom that has swept several other states. Given its high English speaking population, the state has potential to attract BPO players. "The Government of Goa has firm plans in this regard and had set up a separate infotech corporation which will focus on this activity in the field of IT. EDC will, no doubt, support the activity when it comes to the financing of specific projects on the ground. There is no doubt that the English speaking population of Goa with an average knowledge of other Latin languages should contribute to a firm foundation for such business once the hardware infrastructure is in place, which is in process of being positioned by the government through the IT department," D'lima points out.
Traditional sectors like tourism are looking up after the extended slowdown. The state government is making significant effort to reduce costs for the tourists by reducing taxes and improving infrastructure for the business. EDC expects stronger growth in tourism which will have a cascading effect on the all-round growth of Goa's economy.
Sounding emphatic on the government's performance in the last one year, D'lima claimed that the state was a preferred investment destination on a number of counts. "As a consequence of above average financial performance of the state, the rating agency CARE has upgraded EDC bond for Rs 80 crore from A - (SO) to A (SO)," he adds.
In the red, Goa EDC hopes to turn the tide
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