The Union Territory government has planned to identify ways to recover the public account with the Reserve Bank of India, which has depleted to a negative balance of Rs 700 crore during the 2012-13 fiscal year.
Puducherry Finance Secretary-cum-Development Commissioner Raajiv Yaduvanshi said certain items of expenditure should be deferred and directed UT officials to submit a report by prioritising the items of expenditure.
The grim financial situation has left government employees worried. The Pondicherry State Government Employees Central Federation responded by urging the Government of India to close down the separate public account of the Puducherry government and merge it with the Consolidated Fund of India maintained with the Reserve Bank of India.
P Lakshmanaswami, general secretary of the federation, said the administration was unable to manage its finances ever since the opening of a separate public account in 2007.
Assets were not in proportion with liabilities of the government. With the government set to borrow an additional Rs 390 crore, the debt burden will cross `5,000 crore.
The situation had prompted deferment of payment of arrears to government employees in instalments. The GPF of employees was also at stake.
Under the circumstances, it remained the only way to overcome the financial crisis the UT was in, said Lakshmanaswami.