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The Union Territory of Puducherry will present its full budget in August and the state planning board will meet on July 6 for finalising the draft budget.

Lieutenant Governor of Puducherry Tamilisai Soundararajan will preside over the planning board meet in which Chief Minister N. Rangasamy, ministers, Members of Parliament from Puducherry, and officials will participate. The finalised draft will be forwarded to the Union Home Ministry for approval.

The Chief Minister, who holds the finance portfolio, will present the final budget in the state Legislative Assembly in August after the vetting from the Union home ministry. Sources in the Government, however, told IANS that the date of presenting the budget will be decided only after the approval of the draft budget comes from the Union home ministry.

It is to be noted that the UT government had presented a vote on accounts or interim budget a couple of months ago.

The UT government had delayed the presentation of the budget to have full clarity regarding the Goods and Sales Tax (GST) compensation.

The Territorial government of Puducherry has been suffering a deficit in revenue collection after GST was implemented and the government is dependent on the GST compensation. Until full clarity on GST compensation is obtained, the government will not be able to present a full budget and hence it has been delayed to August.

A senior official with the finance department of Puducherry government told IANS that the territorial government could not collect the base revenue of Puducherry for 2015-16, Rs 1095 crore before GST was implemented even after five years of GST.

The revenue gap according to the official was bridged by compensation which accounted for 21 per cent of the revenue of the UT in 2021-22. Without this compensation, the Union Territory of Puducherry will have a revenue gap of Rs 1300 crore and would have had a serious impact on welfare schemes of the territorial government.

The Chief Minister has already requested the Prime Minister for an additional requirement of Rs 2000 crore as central assistance beyond the Rs 1729 crore earmarked in the central budget for the territory.

The silver line for the territorial government is the huge revenue it has been receiving from the excise department through Indian Made Foreign Liquor (IMFL), arrack, and toddy sale in the four regions of the territory.

In 2021-22 alone, the state fetched Rs 1063 crore as its revenue from excise much above its estimated Rs 1000 crore. Of this IMFL accounted for Rs 778 crore, Rs 151 crore from sale of beer, Rs 63 crore as revenue fee for arrack and toddy, and Rs 60.5 crore as license renewal fee.