Interim budgets adversely impact economic development of Puducherry: former MP

Criticism of AINRC-BJP government in Puducherry for delay in full budget presentation, hindering capital expenditure for growth.

Criticising the AINRC-BJP government in Puducherry for the delay in presenting a full budget, former Member of Parliament and president of Puducherry Maanila Makkal Munnetra Kazhagam M. Ramadass said the Union Territory has suffered because of the reliance of successive governments on interim budgets, leaving little space for capital expenditure which was essential for necessary growth.

The economist-turned politician, in a statement, said the Planning Board of Puducherry last week had projected an outlay of ₹ 12,700 crore for the fiscal 2024-25. This budget size was not a full budget for 2024-25 but only a continuation of the interim budget of ₹ 4,634 crore presented by the government in the Assembly on February 22, this year.

The board could have fixed the same outlay after the Union government announced an assistance of ₹ 3,269 crore for the Union Territory in the budget presented by Union Finance Minister Nirmala Sitharaman in February before the Model Code of Conduct came into force for the Lok Sabha polls. Several State governments presented a full budget before MCC came into force, he pointed out.

“For the AINRC-BJP government, the intervening Parliamentary election was just an excuse to present a vote on account for the first five months of the current financial year. The Puducherry economy and forces of growth have immensely suffered due to the presentation of an interim budgets during the past several years,” he said.

The outlay projected by the Planning Board, according to Mr. Ramadass, was paltry considering the context of an 8% annual inflation rate. Last year’s budget size was around ₹11, 600 crore and the projected outlay for the year is ₹12 700 crore, which is higher only by ₹ 1,100 crore. But viewed in the context of an 8% annual inflation rate, the real increase in outlay is only to the order of ₹ 11, 739 crore, which is just a paltry increase of ₹139 crore over last year’s outlay, he said.

Mr. Ramadass stressed the need to set aside 25% of the outlay for capital expenditure to meet the multiple requirements of sectors such as agriculture, irrigation, animal husbandry, fisheries, industries, health and education.

Pointing out the inadequacies in the projected outlay, he said a bigger budget size was necessary to effect a boost to capital expenditure. This higher spending could be financed by seeking an assistance of 30% of the budgeted outlay as grant-in aid from the Centre as well through special drives to collect arrears of revenue from Electricity, Sales Tax, Transport and loans given to individuals and institutions.