Puducherry CM Rangasamy makes case for U.T.'s inclusion in Finance Commission to NITI Aayog member

The Hindu

17-07-2025

Chief Minister N. Rangasamy has reiterated the demand for Puducherry's inclusion in the Central Finance Commission (CFC) during a meeting with Arvind Virmani, Member of NITI Aayog, who called on him during a visit to the city.
While no formal memorandum was submitted to the NITI Aayog body, Mr. Rangasamy utilised the occasion of the meeting to press for CFC member status citing the grave financial crisis in the Union Territory that impeded the development agenda of the NDA governments at the Centre and the Union Territory.
The Chief Minister pointed out that Puducherry was missing out on a share from the divisible pool earmarked for States as it remained outside the purview of the CFC. With limited Central funds and scope for generating own revenue, especially after the establishment of a separate Public Account in 2007, the Union Territory was unable to fulfil its welfare commitments or undertake development projects, he said.
Mr. Rangasamy also made the case for 100% funding for Centrally Sponsored Schemes (CSS), citing the drastic reduction of Central funds in the Union Territory's annual Budget outlay over the recent years.
Speaker R. Selvam, Chief Secretary Sharat Chauhan and A. Muthamma, Commissioner-cum-Secretary were present.
AIADMK submits memorandum
Meanwhile, the AIADMK urged the NITI Aayog to consider inclusion of the Union Territory in the Central Finance Commission and a reversion to the pre-2007 practice of the Union government fully financing the Centrally Sponsored Schemes.
In a memorandum submitted to the visiting NITI Aayog member, A. Anbalagan, AIADMK secretary pointed out that Puducherry's exclusion from the CFC has constrained the funds available for implementing welfare schemes.
Even the State's share of 40% to CSS could not be contributed by the Union Territory. Earlier, the CSS were fully funded by the Central government and there was no State share. But this system was changed and the Union Territories with Legislative Assemblies were required to make a contribution of 40% as State's share.
'This puts our Union Territory in a difficult position. We would request you to kindly arrange for revival of the old procedure of full funding by the Union government for Centrally Sponsored Schemes,' the memorandum said.
It also pointed out that Puducherry had a legacy loan of around ₹2,600 crore when a separate Public Account was adopted for the Union Territory in 2007. Repeated requests to Union government by Puducherry administration to write off the legacy loan have only gone in vain. The AIADMK urged the NITI Aayog to facilitate the waiver of the loan.
Though it is another matter that Puducherry had not conducted local body election since 2016, even if such an exercise were to be completed, the Union Territory could not get financial assistance from the Central government as it was not included in the CFC.
Pointing out that even the newly-created Union Territory of J&K was included in the Finance Commission, the AIADMK felt that it was imperative to include Puducherry in the planning and fund devolving body to liberate the Union Territory from the acute fiscal crisis.
The AIADMK also argued that the U.T.'s inclusion in the CFC would only enable the NDA government in Puducherry, which has been executing a number of welfare schemes for the betterment of the public, to fully align with the goal of making 'BEST Puducherry' as envisaged by the Prime Minister.