PUDUCHERRY: Former MP M Ramadass on Thursday appealed to Lieutenant Governor Dr Tamilisai Sounderarajan and Chief Minister N Rangasamy to get Puducherry included in the 16th Central Finance Commission (CFC), which is slated to be constituted in November, to avail more funds.
The CFC, governed by Article 280 of the Constitution, is responsible for determining resource sharing between the Centre and states over five years starting from April 1, 2026.
Puducherry has not received the benefits of the CFC so far due to its exclusion from the commission, which is a result of its administrative status of a UT with the legislature. Thus, it was neither categorised as a state in the CFC, nor in the separate finance commission for UTs without legislatures, (since Puducherry is a UT with a legislature). Thus, Ramadass stressed that Tamilisai and Rangasamy should engage with the Union Finance Minister.
He proposed two measures: amending the Constitution to extend the term 'state' in Article 283 (3) to include UTs, thereby enabling revenue distribution from taxes on par with other states; alternatively, including a provision in the terms of reference of the finance commission to ensure its recommendations are applicable to UTs, said Ramadass. This, he added, needs to be done before the Centre promulgates the order appointing the finance commission in November.
Puducherry should be considered as a state as it functions as one, even though it's officially a UT. It has an elected legislature, participates in presidential elections, maintains a Public Account, is part of the GST council, and participates in the development council meeting of CMs of southern states. Its taxation and expenditure system resembles that of states, with borrowing rights and financial discipline in place, said Ramadass, also a renowned economist and former Dean of Pondicherry University. Despite Puducherry's participation in the GST Council and that of southern states, it has not received any share of tax devolution, grants and developmental funding, added Ramadass. This has deprived Puducherry of investing in capital, impacting economic growth and employment opportunities.