Include Puducherry under the ambit of Central Finance Commission, says Ramadass

The former MP called for the Assembly to pass a resolution pressing for the UT’s inclusion into the CFC.

The former MP called for the Assembly to pass a resolution pressing for the UT’s inclusion into the CFC.   | Photo Credit: S.S. Kumar


Former MP calls for campaign outside Parliament to highlight the ‘continuous neglect of Puducherry’

Former MP S. Ramadass has urged lawmakers to make a cogent and convincing case to the Finance Panel to press for Puducherry’s inclusion in the ambit of the Central Finance Commission (CFC).

In a statement, Mr. Ramadass suggested that the government convene a special session of the Assembly and pass a resolution in this regard and submit the same to the Prime Minister, Finance Minister, Home Minister and the Chairman of the Finance panel. He also wanted a maximum pressure campaign inside and outside Parliament involving MPs and all-party delegations to highlight the continuous neglect of Puducherry.

While the Union Cabinet has extended the term of the 15th Finance Commission by one more year to make a fresh assessment of the resources of the States and the Centre, reports from Delhi suggested that the Union Territory (UT) of Jammu and Kashmir (J&K) and Ladakh and the merged Territories of Daman and Diu and Dadra and Nagar Haveli will be included under the purview of the recommendations of 15th Finance Panel.

Article 280

Normally and constitutionally UTs with or without legislature are not included in the Finance Commission. Article 280 of the Constitution lays down that the Finance Commission shall make recommendations on the distribution of the net proceeds of taxes between the Union and the States (not UTs). However, it is not clear whether Article 280 of the Constitution will be amended to include these new UTs under the ambit of 15th Finance Commission.

In the present scheme of things, UTs with legislature, like J&K and Puducherry, will have to remain outside the purview of both Finance Commissions, he said.

However, the Central government through the Jammu and Kashmir Reorganisation Act has very cleverly mandated the Finance Commission to treat both the newly-formed UTs as States and devolve resources to them out of the divisible pool, Mr. Ramadass said.

‘Partisan behaviour’

“The CentralgGovernment should have shown the same alacrity and concern to Puducherry as well. This partisan behaviour of the Centre heaps high injustice, inequity and humiliation on Puducherry which needs to be redressed immediately,” the former MP said.

According to the former MP, Government of India should realise that Puducherry has almost all features of a State. “While the demotion of J&K is just one year old, that of Puducherry is 56 years old . If the UT Act had not intervened, Puducherry would have remained as a State and would have been entitled to Finance Commission transfers,” Mr. Ramadass said.

The UT of Puducherry performs almost all the functions delineated in the State and concurrent lists, and also contributing to the central pool of resources and faces the dilemma of elastic functions and inelastic revenue.

On the other hand, in the past, the Central Sales tax revenue collected from Puducherry had not been credited to the Consolidated Fund of Puducherry as in the case of other States but to the Consolidated Fund of India.

The grant portion of Plan Finance has been drastically reduced from 90% to 30% and conversely the loan portion has increased from 10% to 70%.

Consequently the burden of legacy loan has considerably increased. And, from 2007 onwards, when the Public Account was opened, the Centre has stopped giving loans.

However, the debt due to the Government of India was not waived at the time of opening of Public Account, Mr. Ramadass said.

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Printable version | Dec 9, 2019 11:33:15 AM | https://www.thehindu.com/news/cities/puducherry/include-puducherry-under-the-ambit-of-central-finance-commission-says-ramadass/article30126239.ece

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