PUDUCHERRY: People are keeping a close watch on Chief Minister N Rangasamy and his council of ministers as they take up the exercise to finalise the draft annual plan for the Union Territory for the financial year 2011-2012, before taking it up with Planning Commission for approval.The government is expected to seek a plan size of around `3,000 crore, going by previous year’s plan size of `2,500 crore and the interim budget of `2,241 crore for first six months. Besides, the CM needs a higher plan size to implement the electoral assurances.Though in the previous year the Planning Commission approved a plan of `2,500 crore, the Congress government fell short of utilization of the entire outlay by around `700 crore. The main problem has been the funding pattern for plan allocation, as 42 per cent of the allocation was raised through loans. Puducherry’s plan utilisation in the past has been the same even when a separate public accounts was opened with the Reserve Bank of India in December 2007. In 2008-2009, only `1,500 crore was utilised out of `1,750 crore.Governments prior to the opening of the public account were able to fully utilise allocations, including the ones headed by Rangasamy. Not withstanding this fact, a higher allocation was sought each financial year and the Planning Commission complied. The reason has been political with governments trying to earn brownie points by securing higher plan allocations. With Congress governments at the centre and the UT, it got materialised.Inspite of the scenario, Rangasamy is expected to seek a higher allocation. However, he is unlikely to be too ambitious. With a loan burden of `4,040 crore and an interest of `400 crore, there would be pressure on the funds generated for paying dues. Further loans would not be possible without paying the dues.The positive side is that there has been good revenue collection from sales tax and excise duty, two main revenue generators for Pondy. Commercial tax revenue went up to `833 crore, exceeding the target of `680.78 crore, while the excise duty from liquor was `378 crore in 2010-2011. In the current year the commercial taxes department has netted `151.44 crore comprising of `108.69 crore VAT and `42.75 crore CST. On an average the collections are `59 crore per month.However, this revenue may not be sufficient to support a higher plan, with only 30 per cent of the plan being supported by the Centre as grants. The remaining 70 per cent has to be met with the UT’s own resources and loans. The UT’s revenue is not expected to increase with the resource base dying without much industrialisation. Proactive measures are required to bring in new industries. Another area to target would be tourism.The Chief Minister realises the situation. He recently called on Union Home Minister P Chidambaram seeking a waiver of the loan as a one-time measure. “We hope that understanding the situation, the Centre would assist the UT through more grants,“ Rangasamy said on his return from New Delhi.
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