Rajya Sabha member N. Gokulakrishnan has called upon the Centre to waive the legacy loans to the tune of ₹2,200 crore and sanction adequate assistance to ease the financial crisis facing the union territory.
Participating in a budget discussion on the Union Budget 2017-18 in Rajya Sabha, Mr. Gokulakrishnan said the union territory had been reeling under a severe financial crisis despite its special status with a Legislative Assembly.
“It neither gets the grants in full which are due to the union territory nor does it enjoy the flow of funds by devolution as recommended by the Central Finance Commission though it has a Legislative Assembly like other States.”
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Mr. Gokulakrishnan said that a separate Public Account for the union territory had been opened in 2007 at the insistence of the Centre. The union territory is burdened with a loan of ₹7,200 crore.
The government should at least waive the legacy loans to the tune of ₹2,200 crore and sanction a special grant of ₹1,700 crore to tide over the crisis.
Although the 13th Finance Commission had allocated ₹87,519 crore for distribution to local bodies of various States, Puducherry did not get even a single rupee. Consequently, municipalities, commune and village panchayats in Puducherry had become defunct because of paucity of funds, he said.
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The union territory had implemented the recommendations of the VII Pay Commission recommendations with effect from January 1, 2016. But additional assistance had not been granted towards the pay commission recommendations which work out to ₹700 crore. This was not justified and the Centre should compensate the union territory, he said.
The Centre should grant a one-time financial package and salvage the panchayat raj institutions with due devolution of funds either from the Finance Commission or the High Level Finance Committee (HLFC) of the Union Home Ministry.
The union territory would be brought under the ambit of the Central Finance Commission for devolution of funds without any delay, he added.