The Union Cabinet on Tuesday cleared an ordinance amending the Andhra Reorganisation Act, but did not include the ‘special category status’ to Seemandhra that would have given it extra funds from the Centre.
It also approved a separate ordinance to rejig the boundary in favour of Seemandhra but did not announce it so as not to escalate law and order problems in newly-created Telangana.
Sources said the communiqué from the Cabinet Secretariat to the Home Ministry said the Cabinet had approved the ordinance on reorganisation so as to facilitate the bifurcation of Andhra Pradesh and revoke President’s rule on June 1 so that TRS chief K Chandrashekar Rao can be sworn in on June 2 as chief minister of Telangana.
The Cabinet Secretariat “draft” did not mention grant of special category status to Seemandhra which, sources said, meant that the issue had been struck down. The proposal was to give the status for five years, and would have meant an additional Rs 5,000-crore grant to Seemandhra each year.
Sources said both Planning Commission and Law Ministry objected to giving the status, as the existing procedure was to give such executive dispensation only after recommendation from the National Development Council — and to not bring it through the legislative route.
The UPA government last March approved the status, but it got stuck with the President who did not want to sign an ordinance approved by an outgoing government. There were procedural complications as well.
Special category states receive 90 per cent of plan assistance as grant and just 10 per cent as loan — as against the usual 30 per cent grant and 70 per cent loan for other states. Special category states receive special treatment from the Finance Commission in respect of devolution of central tax revenues.
Tuesday’s Cabinet meeting also cleared the Polavaram Irrigation Project Ordinance that transfers 200-odd villages from Telangana to Seemandhra to facilitate the construction of the Polavaram dam and save the temple town of Bhadrachalam from inundation.
Although the UPA government declared Polavaram as a national project, it was unable to notify the ordinance on the same, as the model code of conduct had come into effect. It approved the ordinance last February.
The transfer of villages is being vociferously opposed by Rao who has callled for a bandh on Thursday.
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