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Amendment eases borrowing norms

Rajesh Nair

Pondy can now take up projects without Central assistance "With annual 3 per cent increase in Central assistance, it was difficult to take up big projects"

PONDICHEERY: An amendment has been made to the Union Territory Act, 1963 allowing the administration to raise loans from any external agency.

This would help the Government in taking up long overdue infrastructure projects, officials said.

"With only an annual 3 per cent increase in Central assistance it was difficult for the Government to take up big projects."

According to highly placed sources in the Government, the amendment was made on May 10. From now on, the Government can borrow from financial institutions, including the World Bank and other agencies.

Before the amendment, the administration could not borrow from sources other than the Government of India. Over the years, the Pondicherry Government has borrowed money from the Government of India to fund non-plan schemes.

"We used to get Central assistance for plan schemes in the ratio of 65 per cent grant and 35 per cent loan. In 2005-06, the Government revised the norms to make it 30 per cent grant and 70 per cent loan," a senior officer told The Hindu .

Last year, the Central Government gave Rs. 72 crore as loan for non-plan projects. As of March 31 this year, Pondicherry had outstanding loans of Rs. 1820.26 crore.

The Government has now almost completed the formalities for a loan of Rs. 247 crore from HUDCO for an underground sewerage project.

"The Planning Commission has cleared the proposal and we should get the money in the current year itself," the source added.

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