PUDUCHERRY: Instead of 30 per cent central assistance under plan expenditure as per the financing pattern for the UT, the central assistance (CA) has dropped to just 11.55 per cent of plan expenditure in 2010-2011. There has been a steady decline of CA since 2006-2007, when the financing pattern for the Union Territory was made on par with other states by the Union government. Despite the plan size going up every year, the percentage of central assistance has reduced and this resulted in non- utilisation of the plan size completely. The plan expenditures have been much lower in comparison to the plan size.Information from government sources said that the UT had received 23.81 per cent central assistance in 2006-2007, 23.69 percent in 2007-2008, 14.79 percent in 2008-2009, 18.86 percent in 2009-2010 and 11.55 percent in 2010-2011. In fact, the CA had been `246.85 crore for a plan outlay of `1410 crore budget estimates (BE) in 2006-2007, `257.49 crore for a plan outlay of `1455 crore (BE) in 2007-2008, `156.91 crore for plan outlay of `1750 crore in 2008-2009, `273.52 crore for plan outlay of `2250 crore in 2009-2010 (BE) and `180.42 crore for a plan outlay of `2500 crore in 2010-1011 (BE). The lowering of central assistance has led to lower plan expenditure of `1036.85 crore in 2006-2007, `1086.73 crore in 2007-2008, `1060.76 crore in 2008-2009, `1449.93 crore in 2009-2010 and `1562.50 crore in 2010-2011.The normal CA released by Government of India prior to annual plan 2006-07 was in the ratio of 70 per cent as grant and 30 per cent as loan. Since the Centre modified the financing pattern for Puducherry it has become 30 per cent as grant and 70 per cent as loan. But in actual practice even that 30 per cent grant has eluded Puducherry. So far the maximum percentage grant received has been 23.82 per cent of aggregate plan expenditure and not on plan size. This has affected the development of the Union territoryThe UT is also becoming dependent on market borrowings and negotiated loans to support the plan expenditure. The market borrowings and negotiated loans have increased the loan burden of the UT which now stands at `4040 crore.The loans received by the government were `443.77 crore in 2006-2007, `425.04 crores in 2007-2008, `444.48 crore in 2008-2009, `659.45 crore in 2009-2010 and `845.01 crore in 2010-2011. Despite partial repayment of loan and interest of `283.65 crore in 2006-2007 , `320.91 crore in 2007-2008, `383.09 in 2008-2009, `418.48 crore in 2009-2010 and `451 crore in 2010-2011, the loan burden has risen steeply from `2805.95 on March 31, 2009 to `4040.57 on March 31, 2011.Expressing concern over the scenario, MLA and former Education Minister K Lakshminarayanan said that the government should tone up the planning by appointing an economic advisory committee headed by a person proficient in government economics and finance. There are other areas that need to be fine tuned and this could be done by getting projects approved with financial sanction for release of funds by government of India. The government needs to be more proactive in submitting fund utilisation certificates so that there is no delay in release of funds.Since several schemes beyond the `50 crore financial power of the Lieutenant governor require the approval of the Centre, often there is delay in implementation due to the movement of files between Puducherry and New Delhi.Unless followed up,it does not materialise, said a former minister. The funding planned from UT’s own resources takes time, unless the finance mobilised through tax and non-tax revenue is collected and deposited to the exchequer.The lowering of the CA has come as a cause of concern and need serious attention. The CM has approached the centre for a one-time grant of nearly `3500 crore but that is only a temporary solution. The government needs to deeply concentrate on finance and planning for the development of the UT.
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