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No Special favours, but some key gains

AP complains that the bifurcation of the state in June 2014 left the successor Andhra at a major disadvantage as its revenue-generating capital, Hyderabad, went to Telangana.

Written by Sreenivas Janyala |
September 9, 2016 12:22:46 am
Andhra drought, drought mitigation measures, rains in Andhra, Chandrababu Naidu Andhra CM Naidu, AP, Andhra Pradesh news, India news Andhra Pradesh Chief Minister N Chandrababu Naidu. (PTI File Photo)

The Indian Express lists major demands that Andhra had of the Centre — and what it got

Special Category Status

WHAT ANDHRA WANTED: Being designated a Special Category State would have got Andhra Pradesh more central funding for projects, tax concessions, and additional funds to bridge the revenue deficit, projected to rise to Rs 20,000 crore between 2014 and 2019. AP complains that the bifurcation of the state in June 2014 left the successor Andhra at a major disadvantage as its revenue-generating capital, Hyderabad, went to Telangana. It also lost in terms of industrialisation, and the truncated state has been demanding that the Centre provide assistance so that it gets a level playing field to compete with neighbouring states. Special Category Status — which, though not a part of the Andhra Pradesh Reorganisation Act, was promised in Parliament in February 2014 by then Prime Minister Manmohan Singh — has become a deeply emotive issue for the people of Andhra.

WHAT IT GOT: Special Category Status ceased to exist after the government accepted the recommendations of the 14th Finance Commission, along with the recommendation to increase the devolution of central tax revenues to 42% for states. What Andhra has got instead is a special economic package that is “equivalent” to what it would have got if Special Category Status had been granted. The package is for 5 years — and AP will get 30% more funds than other states, over and above the 42% share of central taxes that it is entitled to. The Centre will also give it benefits that would have been due for Externally Aided Projects in a Special Category state. The Central Board of Direct Taxes will issue two notifications regarding tax concessions extended to AP. Also, the Centre will continue to provide Rs 50 crore each per year to seven backward districts of Srikakulam, Vizianagaram, Visakhapatnam, Anantapur, Kurnool, Kadapa and Chittoor.

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Polavaram Project

WHAT ANDHRA WANTED: Andhra wanted national project status for the Polavaram multipurpose hydel project being built on the Godavari in the state’s West Godavari district. A national project is entitled to 90% central government grant for its irrigation and drinking water components — a pattern of funding that a NITI Aayog sub-group of Chief Ministers in October 2015 suggested should be changed to 60-40 for non-Special Category States.

WHAT IT GOT: In March 2016, the government had informed Lok Sabha that Polavaram had been included in the list of India’s 16 national projects — it has now agreed to go beyond the 90% funding and bear the project’s entire cost, even though the actual construction would have to be continued by the state government. Funding could come through the National Bank for Agriculture and Rural Development (NABARD) with retrospective effect from April 1, 2014.

This is a huge relief for Andhra. In October 2015, the state cabinet had raised the estimate of the project cost to Rs 36,000 crore from the Rs 16,000 crore estimated in 2011. Odisha and Chhattisgarh are opposing the project because the reservoir will submerge tribal villages in both states. National project status means disputes with these states will be resolved by the Centre.

Building Amaravathi

WHAT ANDHRA WANTED: AP wanted Central funds for the construction of its capital Amaravathi. An expert committee has estimated that over Rs 27,000 crore would be required to establish the new city, including Rs 10,519 crore for capital zone buildings, Rs 1,536 crore for capital zone infrastructure, Rs 5,861 crore for city infrastructure, and Rs 9,181 crore for city infrastructure growth extension.

WHAT IT GOT: Union Finance Minister Arun Jaitley remained non-committal on this issue. The central government has given Rs 2,000 crore so far for the building of Amaravathi, and Jaitley gave no specific assurance of further funding.

Additional funds

WHAT ANDHRA WANTED: AP wanted the Centre to give additional funds to bridge the revenue deficit that has already amounted to over Rs 10,000 crore.

WHAT IT GOT: The Centre has said that Rs 3,975.50 crore have been released to bridge the revenue deficit for 2014-15, and the remaining amount would be released in instalments. However, as AP also includes funds given under the farm loan waiver scheme, subsidy to industries, and welfare schemes in its revenue deficit calculations, it remains to be seen if it gets the entire amount.

Railway zone

WHAT ANDHRA WANTED: A new railway zone headquartered at Visakhapatnam.

WHAT IT GOT: Jaitley has said that Railway Minister Suresh Prabhu, who is a Rajya Sabha MP from Andhra Pradesh, is considering the request. However, the Ministry of Railways has expressed its inability to consider Vizag as headquarters of a new railway zone in the absence of existing infrastructure. Visakhapatnam — known as Waltair — is currently one of the 3 divisions of the East Coast Railway Zone headquartered in Bhubaneswar, over which Odisha would be reluctant to give up control. A proposal to base a new railway zone in Vijayawada — one of the 6 divisions under the South Central Railway headquartered in Secunderabad in Telangana — too has not moved forward.

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