Chief Minister V. Narayanasamy has urged President Ram Nath Kovind to take steps to declare Statehood for Puducherry. In a memorandum to the President, who was in the city on a two-day visit, Mr. Narayanasamy, after providing a historical backdrop of erstwhile Pondicherry's accession to the Indian Union, pointed out that the matter regarding grant of Statehood to Puducherry UT has been constantly pursued with the Government of India since 1987. The government had passed several resolutions in this regard as well, he said.
According to the memorandum, in 2007, based on the directions of the Government of India, the Puducherry government opened a separate public account. However, instead of allowing this small Union Territory to start on a clean slate, the government was loaded with an old loan of ₹177 crore taken by the Government of Puducherry prior to the opening of separate public account.
The government has already repaid ₹1,279 crore towards principal and interest up to October 31, 2019. For maintaining the financial stability of the UT, it is absolutely necessary that the legacy loan should be written off and the amount already repaid so far should also be reimbursed.
The Ministry of Home Affairs has regretted its inability to consider this proposal. However, this issue needs to be revisited by MHA / Ministry of Finance.
The memorandum also sought inclusion of the UT in the Central Finance Commission. The Central Finance Commission includes only the full-fledged States in its terms of reference.
sHence, Puducherry is not included under the terms of reference of successive Finance Commission including the XV Finance Commission. Resultantly, there is no formula for devolution of central funds for the union territory of Puducherry which is a UT with a legislature.
The memorandum pressed the case for inclusion of the UT of Puducherry under the terms of references of XV Finance Commission or provision of financial assistance at the rate of 42% of divisible pool of Central share as is given to States in order to cover the budgetary gap.
The memorandum pointed out that for the last several years, the Central assistance being given to Puducherry remains static with a meagre increase of 4 - 5% forcing the government to go in for borrowings to overcome the fiscal deficit.
It also cited the instance of the newly created Union Territory of Jammu & Kashmir, under the said Act, being included in the Central Finance Commission when Puducherry and Delhi were left out.
Economy
The memorandum said the government strictly followed the fiscal road map and the borrowing limit is less than 23% of GSDP which is below the maximum prescribed limit of 25% of GSDP. But there are huge payment obligations arising out of Supreme / High Court orders due to land acquisition, gratuity to textile mill workers, (PSUs) which alone comes to around ₹150 crore.
Based on an expert committee recommendation (Vijayan Committee), many loss making PSUs are to be restructured for which around ₹200 crore funds are required.
“Thus, if the borrowing limit of Puducherry is raised to 25% GSDP, it will help Puducherry to settle about ₹200 crore of pending /committed liability,” the memorandum said. Meanwhile, the Government of Puducherry has also requested approval for debt srestructuring which may also be considered favourably.
The memorandum said the government may release central assistance for meeting the additional financial implication arising out of the implementation of VII CPC pay scales to the extent of ₹440 crore every year.
The government employees have also been demanding immediate release of arrears of pay as already three years have lapsed after the implementation of VII CPC recommendations. Service Associations have been actively pursuing this issue and there is an uneasiness among the employees.
“Hence, it is requested to consider this issue and settle the long pending demand of arrear salary and pension for the government staff and retired government staff,” the memorandum said.
