U.T. demands 10% annual increase in Normal Central Assistance

The Puducherry administration has demanded a 10% annual increase in Normal Central Assistance for the Union Territory.

Participating in the pre-budget meeting for Finance Ministers of States and Union Territories organised by the Finance Ministry at Jaisalmer in Rajasthan on Friday, Minister for Public Works K. Lakshminarayanan said that the Union Territory had its limitations in finding own resources because of its geographical size and limited natural resources.

Mr. Lakshminarayanan, who attended the meeting in the place of Chief Minister N. Rangasamy who holds the Finance portfolio, said Puducherry should be considered within the scope of a State for the limited purpose of sharing revenue between the Centre and the Union Territory.

“Our request for treating U.T. on a par with State in the matter of devolution of fund has been turned down on the ground of Article 280 (3) of the Constitution that refers to only States. But whenever the Government of India took a policy decision on financial matters, a generic view was taken by treating Puducherry on a par with States,” he said.

In view of these facts, it was requested to include Puducherry under the terms and reference of Central Finance Commission by suitably amending Article 280 (3) of the Constitution as regards the words “States” or a special reference should be made to the Commission to include the Union Territory for devolution of funds, he said.

The administration is critically dependent on the NCA for funds. Hence, there is an urgent need to give a significant jump in NCA and make it formula-based equivalent to Finance Commission’s recommendations. Until then, the Union Territory should be considered for an increase in NCA by at least 10 % every year, the Minister said.