A police raid this month on a bar in Calangute, in the north of the former Portuguese colony, rescued 14 women and girls -- including eight from Nepal -- and led to the arrest of nine people on sex trafficking charges.
State police chief Aditya Arya said further operations were in the pipeline.
The golden beaches and laid-back atmosphere of Goa, on India's west coast, attract huge numbers of domestic and foreign tourists, particularly over the Christmas and New Year period.
But the state's image has been tainted in recent years by a string of corruption scandals involving police and politicians, as well as drug and sex crime revelations.
Non-governmental organisations say prostitution is nothing new in Goa but the problem has mushroomed since a crackdown on so-called "dance bars" up the coast in Mumbai.
"After the Mumbai dance bars closed, the girls were pushed into the sex trade in places like Goa, where they travel to dance in the pubs," said activist Arun Pandey.
"The pubs have girls dancing on the floor, who later can be taken overnight by paying a price," said Pandey, who works with anti-sex trafficking charity ARZ and has studied the impact of vice on the local community.
The state government in neighbouring Maharashtra, of which Mumbai is the capital, sought to ban dance bars -- where women performers gyrate to the latest Bollywood tunes -- in 2005.
The authorities claimed they were fronts for prostitution and underworld activity. The Bombay High Court overturned the ban but many bars closed.
Although police in Goa frequently vow to get tough with bar owners who use their establishments as vice dens, Pandey said enforcement was minimal.
"Local panchayat (village councils) have a right to cancel the licence of these pubs if they are involved in late-night music or prostitution. But this never happens," he said.
Goa attracts some 2.4 million visitors every tourist season, with about 400,000 of them from overseas, and pubs and nightclubs have sprung up along the coast in places including Calangute, Candolim, Morjim and Baga.
Pandey said the sex workers, most of them in their late teens or early twenties, are mainly from northeastern India or smuggled in from Nepal and Bangladesh.
Reports have also suggested that since Goa became popular with Russians increasing numbers of mafia-controlled Eastern European sex workers operate in casinos, beauty parlours, nightclubs and hotels.
State police have formed an anti-human trafficking unit with female officers to tackle the issue but activists say it is woefully under-staffed.
"Police do raid pubs but that's not enough. They should investigate the entire ring rather than just rescuing girls," said Auda Viegas, from the Bailancho Ekvott (Women's Unity) organisation.
"The main cause should be dealt with. NGOs are doing a good job in this field but without backing of state they cannot perform to the fullest."
UNICEF and British charity ECPAT International, which campaigns against child sex abuse, child pornography and trafficking, estimate that some 400,000 to 500,000 children are in enforced prostitution in India.
The Roman Catholic Archbishop of Goa and Daman, Filipe Neri Ferrao, has warned that Goa was becoming a paedophiles' paradise because of curbs on the child sex trade in Thailand and called for "zero tolerance".
If left untackled, the problem would "spell doom" for the state, he said in July.
Police chief Arya insists his force is serious about tackling the issue. "Raids will be conducted as and when information is received," he said. "I am 100 percent transparent and any information provided will not be ignored."