Former Member of Parliament M. Ramadass on Saturday said the Centre has shattered the hopes of people by presenting a ‘zero-sum’ Budget for the Union Territory.
In a statement, the economist-turned-politician said “in view of the severe financial crunch caused by a vicious circle of factors and niggardly financial assistance of last year, it was fondly hoped that this year’s Union Budget would offer substantial financial assistance to Puducherry. The Budget, maintaining status quo, offers the same assistance of ₹1,729 crore to Puducherry as last year. The increase is zero.”
In the last fiscal, the increase was ₹27 crore and the percentage increase was 1.58. In 2020-21, the hike in financial assistance was ₹159 crore as compared to 2019-20 denoting an increase of 10.26%. Only, this year the financial assistance remained the same.
“The behaviour of the Central government, constitutes a brazen violation of celebrated canons of fiscal devolution. The rudimentary test of soundness of assistance is that the current year assistance should at least be more than that of the previous year both in quantitative and percentage terms. The Centre should have at least considered the level of inflation and population growth in deciding the financial assistance. These two variables have grown at 8. 2% (inflation 6% and population growth 2%). The financial assistance should have gone up to ₹1,871 crore this year,” Mr. Ramadass said.
The second major expectation from the Union Budget was that the Centre would extend the period of GST compensation by another five years (from 2022 to 2027).
The present period of compensation would terminate in June 2022 after which Puducherry would suffer an annual financial loss in the range of ₹300 to ₹400 crore which will add to the woes of the already cash-strapped Puducherry.
The Centre also failed to mention anything on according Statehood to the Union Territory, Mr. Ramadass added.
