Rangasamy made several requests to the Centre that Puducherry be granted statehood. Narayanasamy was of the opinion that persistent demands for statehood would be financially disadvantageous to the union territory as government would find it difficult to mobilise funds locally.
In the event of Puducherry becoming a state, it will be a struggle for the government to mobilise funds locally to meet 70 per cent of budgetary requirements as the Centre would meet only the remaining 30 per cent of the required portion in the budget, he once said.
He felt statehood with Special Category Status would be more advantageous to the union territory. Narayanasamy was often critical of the law and order situation in Puducherry and even demanded Rangasamy's resignation.
New Lt Governor Virendra Kataria also made critical observations about the law and order situation, which Rangasamy strongly objected to. Kataria, a former Rajya Sabha member, assumed office on July 10 succeeding Iqbal Singh.