PM is non-committal, Puducherry left with only option to raise loans through RBI to tide over fiscal crisis: CM V Narayanasamy
Narayanasamy said he had brought to the PM's notice the fall in the revenue due to closure of all business establishments, liquor shops and industrial units since the COVID-19 lockdown began.
PUDUCHERRY: Stating that only 12 per cent of the monthly revenue has been realised in the months of March and April in Puducherry and Prime Minister Narendra Modi being non-committal on fiscal assistance to states despite them apprising him of the fiscal sufferings during his video conference on Monday, Chief Minister V Narayanasamy said that the only option for Puducherry was to avail loans through Reserve Bank of India to tide over the current fiscal crisis.
Addressing a press conference, shortly after interacting with Prime minister, last night, Narayanasamy said that he had urged the prime minister to increase the FRBM (Fiscal Responsibility and Budgetary Management) limit to five per cent from the existing three per cent to facilitate Puducherry to avail a loan, besides taking steps to grant moratorium on repayment of loans and interest for six months.
Despite constraints, the government has implemented welfare schemes and supported all sectors of people besides paying full salary to government employees. But there is a severe shortage of funds in May as adequate revenue is still not coming despite reopening shops and industries. This is because trade and industries are delaying payment of GST as the Finance Ministry has extended filing of GST returns and composite returns of GST till June. With no excise revenue either as liquor shops are yet to be permitted to open, the government is compelled to avail loan through RBI, said the Chief minister.
Further to revive the economy, he sought financial assistance from Central government and inclusion of Puducherry in 15th Central Finance Commission and compensation for revenue loss in March and April, said Narayanasamy
As per the directions of Prime Minister, Puducherry Administration will soon send a detailed note to the Centre with regard to the classification of red, orange and green zones based on the situation in the UT, so that more economic activity could be permitted.
Every year, the Puducherry government faces a necessity to repay Rs 1,300 crore to the Centre to settle the loan and the interest, said Health Minister Malladi Krishna Rao stressing on the need for a moratorium on repayment of loans and interest.
Now with the revenue from the excise sector and also other sources of revenue having dried up because of the closure of liquor shops, hotel industry yet to resume, the flow of revenue to the government has dried up. Normalcy in commercial activities is expected to return after a year or two, he said justifying the necessity for a moratorium on loans and interest.