Raising the issue of ‘anomalous’ treatment of the Union Territory in matters related to devolution of funds by the Centre at the 30th meeting of the Southern Zonal Council held at Thiruvananthapuram on Saturday, Lt. Governor Tamilisai Soundararajan said Puducherry was not considered a State for transfer of funds under the Finance Commission formula but was treated as a State for allocation of funds to implement the Centrally-Sponsored schemes.
Representing the Union Territory at the meeting, the Lt. Governor said: “It is our request that since Puducherry is considered as Union Territory under the Finance Commission recommendation, it may be treated as Union Territory for the CSS schemes and ensure 100% funding for CSS programmes.”
Raising concerns about depletion in resource allocation by the Centre to the Union Territory, the Lt. Governor said the Union Territory largely depended on the annual Normal Central Assistance (NCC) extended by the Union Ministry of Home Affairs. However, unlike the allocations made by the Finance Commission that carry automatic inflation indexing, NCC to Puducherry does not factor the inflation index.
In view of this, the percentage of nominal growth in allocation was hovering around 3 to 4% in 2018-19, 10% in 2020-21 and has had a drastic fall to a negative figure of (-)8% in 2022-23. The discontinuation of GST compensation had created a fiscal deficit that could not be bridged by internal efforts, considering the limited consumption base of the Union Territory. The revenue deficit would only widen further unless the Central assistance was enhanced to bridge the gap.
She urged the Centre to include the Union Territory under the scheme, ‘Financial Assistance to States for Capital Investment,’ with an outlay of ₹lakh crore. The scheme aims to provide an interest-free 50-year loan to States to undertake infrastructure projects
₹2000 crore for infra
“We request the Centre to provide a Special Central Assistance of ₹2,000 crore to meet the expenditure towards our critical infrastructure projects, such as airport expansion, port connectivity, upgradation of health infrastructure and construction of new Assembly complex,” Dr. Tamilisai Soundararajan said.
The Lt. Governor urged the Southern Council to prevail upon the Ministry of Jal Sakthi to consider the Union Territory’s demand to link intercepting rivers Varahanathi and South Pennaiyar with the proposed Godavari (Inchampalli / Janampet) - Cauvery (Grand Anicut) link.
The present total water requirement for agriculture, drinking, commercial and industrial needs of the Union Territory is about 5.75 TMC. It is estimated that the requirement would scale up to 7TMC by 2040. Water requirement of the region was being met through groundwater resources and tapping of water through borewells had resulted in the depletion of groundwater and intrusion of saline water as well.
The Lt. Governor also placed before the Council, the Union Territory’s request for permission from Tamil Nadu government to allow its territory to be used for the transportation of sand from Karaikal Port to Puducherry region.
The territorial administration had allowed import of sand by the Karaikal Port but it was not able to bring the material to Puducherry region through Tamil Nadu. The Puducherry government would take all safety precautions while transporting the sand through the Tamil Nadu region, the Lt. Governor said.
The Lt. Governor also reiterated the demand for 395 acres of land from Tamil Nadu for taking up the expansion of Puducherry airport runway. The expansion of the airport would be beneficial for Tamil Nadu as well, as it would bring air connectivity to contiguous districts of Villupuram and Cuddalore, she said.
