Finance Department awaits nod to fix loan component before sending AFS for approval

The Finance Department has estimated ₹1,700 crore as the loan component for the outlay fixed for next fiscal and the quantum that could be borrowed by the U.T. has to be approved by both MHA and Finance Ministry

It will be after a gap of 12 years that a government in Puducherry will be presenting a full Budget before the beginning of the financial year. | Photo Credit: S.S. KUMAR

With the government sticking to its decision to present a full Budget next month, the Finance Department was awaiting nod from the Centre to show the loan component in the Annual Financial Statement (AFS) for 2023-24 before it is forwarded to the Ministry of Home Affairs and Finance for clearance. 

In January, the Puducherry Planning Board under the Chairmanship of the Lieutenant Governor had fixed draft of the annual outlay for the next financial year at ₹11,600 crore, an increase of ₹1,000 crore more than the Budget Estimate of ₹10,696 crore for 2022-23. Consequently, the Finance Department has estimated ₹1,700 crore as the loan component for the outlay fixed for next fiscal. The quantum that could be borrowed by the Union Territory has to be approved by both MHA and Finance Ministry. 

“We are waiting for the nod so that the loan component could be made part of AFS and sent to MHA for clearance before the Budget is presented in the Assembly. The borrowing fixed by the Centre for the current financial year was ₹1,400 crore. We have sought sanction to raise ₹300 crore more for the next fiscal. We are expecting sanction for the loan part of AFS in a few days and after that Budget clearance will be obtained. The sanction from the Centre to fix our borrowing limit for a fiscal is one of the crucial parts of Budget preparations,” an official told The Hindu. 

If the Centre permits the Union Territory to raise ₹1,700 crore next fiscal, the debt/Gross State Domestic Products ratio will go up to 24.84% from the current ratio of 24.28%. Under the Fiscal Responsibility and Budget Management Act, Puducherry with its limited tax and non-tax revenue sources should not cross the ratio of 25%, the official said.

Budget session 

The Assembly Secretariat is gearing up to reconvene the house sometime in the second week of March. “An announcement will be made shortly. The duration of the session will be between 10 to 20 days,” a source in the government said. The session is likely to commence on March 9 with the customary address of the Lt. Governor, the source added.

It will be after a gap of 12 years that a government in Puducherry will be presenting a full Budget before the beginning of the financial year. The practice followed by successive governments was to present a vote on account and present a full Budget after four-five months of the fiscal. “The MHA itself has directed the government to present a full Budget instead of relying on vote on accounts,” the source said.