Former MP Ramadass pushes for higher budget allocation to boost Puducherry’s growth
PUDUCHERRY: Stating that capital expenditure is necessary to boost economic growth, M. Ramadass, President of the Puducherry Maanila Makkal Munnetra Kazhagam and former Lok Sabha member, has urged the AINRC-BJP government to significantly increase the Union Territory's budget to Rs 13,500 crores.
The outlay of Rs 12,700 crore projected by the State Planning Board, which is a continuation of the interim budget of Rs 4,634 crore submitted in February 2024, is insufficient to meet the region's development needs, he said in a statement.
Criticizing the government for not presenting a full-fledged budget before the parliamentary elections, Ramadass, an economist turned politician, said that interim budgets over the years have affected the development of UT.
Immediately after the central assistance of Rs 3,269 crore was announced in the Central Budget in February 2024, the outlay could have been fixed in the first week of February and a full-fledged budget was presented similar to Tamil Nadu and Karnataka.
With Rs 4,634 crore already spent, the upcoming budget will only provide Rs 8,066 crore, which Ramadass argued would primarily cover salaries, pensions, subsidies, debt servicing, and welfare schemes, leaving little for development.
"The budget's proposed outlay is higher by Rs 1,100 crore than last year's allocation, but considering the 8% annual inflation rate, the real increase is merely Rs 139 crore," Ramadass stated. He emphasized that this marginal increase is inadequate to address the challenges facing Puducherry and called for the budget to be raised to at least Rs 13,500 crore.
He proposed that at least 25% of the enhanced outlay should be earmarked for capital expenditure to address the urgent needs in agriculture, irrigation, fisheries, industries, education, health, transport, and other critical sectors.
To finance the higher spending, he suggested that the Puducherry government seek at least 30% of the budgeted outlay as grants-in-aid from the Central Government (CG), amounting to Rs 4,050 crores, and to cover 100% funding for centrally sponsored schemes. Pointing out UT's high debt of Rs 12,000 crore, equivalent to 24% of its State Domestic Product (SDP), he said that the CG should be approached for loan write-offs and grants to cover interest payments.
To boost its revenue, he suggested special drives to collect arrears of revenue from electricity, sales tax, transport, loans given to individuals and institutions, GST, and excise duties, tourism, and the monetization of unutilized government lands. Modernizing IT infrastructure to reduce revenue leakages and increasing taxes on vehicles and liquor were also suggested. Ramadass estimated these measures could increase the government's revenue to about Rs 8,000 crore.
He recommended curbing unnecessary expenses, preventing fund diversions, and expediting capital project completion to save around Rs 1,000 crore. The remaining Rs 500 crore gap could be filled through market borrowing.
Ramadass called for the enactment of the Fiscal Responsibility and Budget Management Act (FRBMA) and the establishment of a Fiscal Road Map Commission to monitor fiscal developments and suggest corrective measures. He believes these steps will transform Puducherry's economic landscape, generating jobs, income, and prosperity while reducing dependency on subsidies and pensions.