PUDUCHERRY: Irked over the Centre's differential treatment of Puducherry, chief minister

said the Centre might as well declare

a 'transgender'.

"When it comes to centrally sponsored schemes and GST collection, the Centre treats us like a state, but for the implementation of other schemes, it treats us like an Union territory. It might as well declare Puducherry a transgender," he said while speaking at a workshop on 'Challenges to India's fiscal federalism' on Thursday.

Narayanasamy also said the Centre continued to ignore Puducherry's demand for including it under the ambit of the 15th finance commission. "If Jammu and Kashmir (the newly formed Union territory with a legislature) can be included under the 15th finance commission, why not Puducherry?" he said. He said giving statehood to Puducherry was the only solution. "On one hand, the Union government is ignoring us and on the other, we face administrative bottlenecks," he said.

He pointed out that when Puducherry merged with the Union in 1963, the Union home ministry extended 70% grant-in-aid and the territory mobilised 30% of the revenue from its own resources every year. "After we opted for open market borrowings, the funding pattern reversed - 70% from the territory's own resources and 30% grant-in-aid from the Centre. Now, even the 30% central grant has been reduced to 26%," he said. "Even a state receives 42% central grants. We are not in a position to tax people. Ours is a welfare state executing several schemes, including old-age pension, free rice, pension for the destitute and physically challenged and waiving off farm loans besides repaying the huge loan availed by the previous government," he said. He said the government has engaged Madras School of Economics to conduct a study on the necessity to confer statehood status to Puducherry. The Centre, which mobilizes revenue through the ports, customs, excise and income tax among others, continued to slash grant-in-aid to the states every year.

"The Union government extends Rs 1,500 crore annually as grant-in-aid to Puducherry whereas we are entitled to receive Rs 3,000 crore annually. We have not so far received GST compensation for August and September from the Centre," he said.