CM pleads with Centre for higher non-Plan gap grant

Narayanasamy apprises Arun Jaitley of the UT’s precarious finances

Chief Minister V. Narayanasamy, on his first visit to Delhi after winning the Nellithope by-election, held discussions with Union Finance Minister Arun Jaitley on Friday on, among other matters, shoring up the precarious finances of the Union Territory through release of additional funds.

Mr. Narayanasamy has pressed for enhancing the non-Plan gap grant to offset the escalation in outgo from the implementation of the Seventh Pay Commission recommendations.

Among the core demands of the Puducherry Government has been the static nature of the non-Plan gap grant (Rs. 500 crore) given by the Centre over successive years even as the increased outgo by way of two dearness allowance components sanctioned every year since has increased manifold.

The outstanding loan as on March 31, 2016, stands at Rs. 6,651 crore and annually the territorial administration makes payments to the tune of Rs. 700 crore towards principal and interest amount. That is more or less equivalent to the entire Rs. 6,665 crore Budget outlay for 2016-17, of which about Rs. 4,000 crore goes into non-Plan expenditure.

According to estimates, the implementation of the Seventh Pay Commission recommendations will require nearly 45 to 50 per cent of the budget for salary, allowances and pension commitments.

A memorandum to the Centre had pointed out that had the additional expenditure towards implementation of Sixth Pay Commission’s recommendations as worked out by the Union Finance Ministry and financial implication due to increase in DAs, been fully compensated, the UT would have got additional grant of Rs.1,352 crore till last year.

Puducherry had been demanding inclusion in the ambit of the Central Finance Commission (CFC). While reiterating the proposal for devolution of funds on the lines of the 13th CFC, the Union Territory had requested Union Ministry of Home Affairs to provide additional grant equivalent to the revenue deficit of Rs.1,210 crore from the date of separation of Public Account till the implementation of The Fiscal Responsibility and Budget Management Act, 2003.

In an earlier memorandum, Mr. Narayanasamy had said that in anticipation that the Centre would consider the demand of the Union Territory positively would provide at least Rs.1,000 crore as additional grant as an interim support, taking into account the financial crunch.

Chief Secretary Manoj Parida said the Centre had approved the outlay for the current fiscal, the Union Territory’s demand for an additional Rs. 1,000 crore for the next year was still on hold.

The Delhi agenda included attending the Puducherry Day celebrations at Lal Chowk theatre on Friday. Lt. Governor Kiran Bedi attended the programme.

Apart from official meetings, Mr. Narayanasamy will call on Congress president Sonia Gandhi and vice-president Rahul Gandhi.

(With additional reporting by Rajesh B. Nair)