Puducherry govt. should increase allocation for capital expenditure, says former MP 

The Planning Board should increase the Budget size to ₹11,500 crore-₹12,250 crore to make up for the neglect of capital expenditure in the past, says Ramadass

Welcoming the plan to present a full Budget for Puducherry at the beginning of a financial year after a gap of 12 years, former Member of Parliament M. Ramadass said on Thursday that the Planning Board, at its meeting scheduled for Friday, should increase the Budget size to ₹11,500 crore-₹12,250 crore to make up for the neglect of capital expenditure in the past.

The presentation of vote on accounts for the last 12 years had hampered economic growth. A bigger Budget size was absolutely indispensable to effect a boost to capital expenditure which has suffered a great deal during the regime of interim budgets. The Budget for the next financial year should should be pegged at an amount ranging from ₹11,500 crore to ₹12,250 crore which is higher than the Budget estimate of ₹10,696 crore this fiscal.

With the Budget size of ₹10,696 crore, the government had set aside ₹9,919. 89 crore for revenue expenditure, he said adding capital spending received only a paltry sum of ₹ 776.11 crore denoting only 7. 3% of the aggregate expenditure.

“The capital outlay to an economy producing a Gross State Domestic Product (GSDP) of ₹37, 206.86 crore is just only 2.1% of its GSDP which is quite inexplicable. Now the government needs to compensate this continued neglect of 11 years by fixing a capital Budget size of ₹2,250 crore. An enhanced capital spending was necessary to create new and pending infrastructure projects. The investment should be spread over 12 months evenly rather than the usual rushing of expenditure in the last three months of the financial year,” he said..

Mobilisation of about ₹12, 000 crore may be a daunting but not an impossible task. The buoyancy in GST and Excise duties along with tourism revenue may add to the own revenue of the Government. Special drives to collect the arrears of revenue due to Electricity, Sales Tax, Transport and other Departments, and loans given to individuals and institutions and reduction of needless and wasteful expenditure may conserve considerable resources.

Enhancing life tax on vehicles and liquor prices may also be thought of. Government may review absolutely unutilized lands of the Government and monetise them for revenue purpose, the economist suggested.