Most Favoured Naidu is now sulking

The NDA Government at the Centre could have trouble on its hands with TDP leader Chandrababu Naidu sulking. The latest fracas is due to the ...

The NDA Government at the Centre could have trouble on its hands with TDP leader Chandrababu Naidu sulking. The latest fracas is due to the delay on behalf of Finance Ministry in giving a recommendation to the World Bank, owing to which Andhra Pradesh may have to forego World Bank assistance to the tune of Rs 1,600 crore during the current financial year.

Naidu’s problem is that to get the funds from the World Bank, the Centre has to recommend or stand guarantee for the loan. While the government played ball last year in giving special treatment to Andhra Pradesh, this year with several other states lining up for similar guarantees, the Finance Ministry has developed cold feet.

The issue was discussed between Naidu and Finance Minister Jaswant Singh at a meeting here on October 4, but over two months later, the Ministry is yet to come up with a decision.

Andhra Pradesh was supposed to get Rs 1,600 crore from the World Bank in a second tranche, after it got Rs 1,700 crore last year under the structural adjustment programme in order to undertake fiscal reforms in the state including public enterprises restructuring and downsizing, civil reforms and power sector reforms. There are as many as eight states — including Tamil Nadu, Karnataka and Orissa — who now want the Centre to underwrite their restructuring loans from World Bank. Naidu, sources say, sees this as a beating to his clout in the NDA Government especially with Mayawati’s BSP cosying up to the government edging the TDP into a corner. The Andhra Pradesh request has been shunting between officials in the Finance Ministry at various levels and hence the delay.

What has angered Naidu most is that the delay is despite an FM assurance that his request would be urgently addressed. But so far, Andhra officials say, no assurance has been sent to the World Bank and with only three months in the current fiscal remaining, sanction and disbursement of the loans may become a problem.

Even TDP leader in Parliament Yerran Naidu met Jaswant Singh to pursue the case and once again a verbal assurance was given but no action has followed. S.K. Arora, Principal Secretary (Finance), Andhra Pradesh Government, wrote to Union Finance Secretary Dr S. Narayan on October 11, pleading that ‘‘since only a few months are left in current finacial year,’’ the decision be taken at the earliest.

Before this, Arora wrote to R. Banerjee, Joint Secretary in the Finance Ministry on May 24, 2001. For over a year there was no action. Arora’s letter said that ‘‘Andhra Pradesh had received World Bank assistance for Economic Restructuring Project and Power Sector Reforms Project. Financial assistance under these projects is essentially for investment purpose, even though both the projects envisaged financial restructuring under fiscal policy reforms.’’