Former MP M. Ramadass on Wednesday said presentation of half-yearly budgets would impinge on economic development of the Union Territory.
In a detailed statement, the economist-turned-politician said the budget presented by the Chief Minister in the Assembly was not the annual financial statement for 12 months but only for seven months. Flaying the successive governments’ decision to rely on vote on accounts for the first five months of the financial year and then presenting a full budget, he said, “All nearly half-yearly budgets impinge on infrastructure and economic development.” The process of communication of budget proposals to various departments after the approval of the Assembly, conceiving and preparing actual plans and estimates, getting expenditure sanction, tendering and the actual implementation would take few months and its completion may not be possible within the current financial year.
In the past years, several infrastructure projects could not be completed due to paucity of resources and want of time, he said.
Further, explaining the difficulties confronted by the territorial administration, he said the Central Assistance would be forthcoming only if the Union Territory government submits the audited statements of account to the Centre on time. For the Union Government to release its share to implement Centrally Sponsored Schemes, the Puducherry government had to contribute its matching grant of 40%, the former MP said.
Funds-driven constraint
Another constraint arises from the insufficiency of funds in the budget required for the implementation of new schemes in the next seven months. The budget estimate for the year is ₹10,696 crore, which is just ₹282 crore more over the previous year’s outlay of ₹10,414 (Revised Estimate).
Considering the annual inflation of 8% and the population growth of 2% , the real outlay for the year is only ₹9,629 crore, which is less than last year’s actual expenditure of ₹9,793 crore.
“Capital expenditure is crucial for development of infrastructure and economic development. The moot question is whether the proposed capital expenditure outlay is sufficient to promote the growth of the economy, which is supposed to grow at the nominal positive rate of 2.9% and the real negative rate of 7.1% [considering the inflation and population growth of 10%],” he said. The budget was also silent on the steps contemplated to re-open textile mills and getting Statehood, he added.
