PUDUCHERRY: The Puducherry government has urged the central government to work out a reasonable and fair methodology for provision of grants in the absence of recommendations by the Finance Commission for taking up developmental works and welfare programmes in the Union territory.
At the NITI Aayog meeting held on Friday through video conferencing, Chief Minister N Rangasamy who was present along with the Chief Secretary and all Secretaries pointed out that the annual growth under central assistance remained almost static over the years. In the fiscal 2021-22, the increase in central assistance is a meagre 1.58 percent. Over a period of five years, the growth is only 4 to 5 percent.
Puducherry is neither covered under the Central Finance Commission (FC) for states nor the Finance Commission for Union territories, because of its unique position as a Union territory with a legislature. Hence there is no recommendation from the FC on the quantum of central assistance to be provided to it based on the procedures adopted for states and Union territories. The long pending demand to include Puducherry within the ambit of the Central Finance Commission needs to be considered, said the Chief Minister.
Stating that the funding pattern under centrally sponsored schemes is 60:40 (Centre: UT), the Chief Minister urged the central government to revert back to the financing pattern of 90:10 as it was in 2016.
Stating that Puducherry is suffering substantial revenue losses due to implementation of GST, the Chief Minister urged the Centre to extend the compensation of loss of revenue to an extent of Rs 140 crore per month, beyond the five-year period from July 1, 2022. Alternatively, it could release additional central assistance in lieu of GST compensation with effect from July 1, 2022 at the end of the five-year period.
After the implementation of GST due to the destination based taxation principle, Puducherry is suffering substantial revenue losses. GST compensation by the Centre is bridging the gap. But post GST compensation period from July 2022, Puducherry will have revenue losses once again, he said.
The Chief Minister also sought central assistance to fund the offshore submerged reef (southern end of the beach promenade) to prevent erosion of the beach and protection of the coast line, and for expansion of the airport. Central assistance is required for land acquisition for runway expansion and to boost the tourism sector. He also expressed the need to promote coastal ferry service connecting Chennai with Puducherry and Karaikal to boost trade and commerce.