Central govt continues to treat Andhra with great disdain !! And TDP does not seem to bother much !!

Thanks but no thanks, You Andhrites are not special !!

Thanks but no thanks, You Andhrites are not special !!

In what is a repeat of its earlier assertion, the central government has re-iterated in parliament once again that it does not propose to grant special category status to any state in future, there by making it amply clear that Andhra need not hope for any miracle in this regard. As per the BJP, spacial status to AP is not in the re-organisation bill and hence does not have any legal sanctity. Never mind that many BJP leaders including Venkayya Naidu and PM Modi himself have promised this repeatedly in their pre-election rallies. They obviously do not care about any more as AP is not an important state for BJP anyway.

What is even more perplexing is the attitude of the state government. Narendra Modi can probably afford to ignore andhra. But does Telugu Desam too feel so? Their leaders are still going on record that they still hope to achieve it. It is not clear if they are fooling themselves or the people. If they are indeed so confident that the centre is waiting for Bihar elections to end before they can declare special status to AP, why not tell the same? If they are not really confident, why is TDP playing this dangerous game where by all means, they themselves will be the biggest losers ?

Even if you leave the “special category tag aside” and see if the central government has helped AP in any credible manner in the last 14 months, the answer is an emphatic NO. Here is a list of what AP has asked for and what the centre has granted, so far. It indeed does give a feeling that the centre treats AP with disdain and the state government is too happy to bear with all insults. It remains to be seen as to how long the people too bear with this indifference of the BJP government at the centre.

  1. The state government had asked the centre to convert the Rs 10,090 crore loans that had been advanced by it over the years into grants. It had also requested the Centre to restructure the outstanding dues of Externally Aided Projects (EAP) into 90 per cent Central grants and limit the state’s liability to 10 per cent. But the Centre did not take any decision.
  2. According to the provision in the State Reorganisation Act, under the special development package, the state government had sent project proposals with an outlay of Rs 24,350 crore over five years and had asked for Rs 5,000 crore to be released for the 2014-15 financial year. But the Centre sanctioned only Rs 350 crore.
  3. The state had requested the Centre to sanction Rs 15,691 crore to bridge the revenue deficit for the 2014-15 financial year, but to no avail. The Centre released Rs 500 crore to fill the revenue deficit gap in the present financial year.
  4. The Centre also raised several queries regarding the state’s Rs 1.35 lakh crore detailed project report on the capital city Amaravati. Instead of releasing  Rs 5,000 crore for the development of the capital’s  basic physical infrastructure,  as initially asked for, the Centre released only  Rs 1,500 crore.

As of today, following is the status of central apathy

  1. Special category status may not happen even though BJP promised during elections that it would provide extended status for 10 years. BJP has reiterated several times its commitment to ‘fulfill its obligations in AP Reorganization Act’ but it has not shown the same commitment to special status issue by assuring any reasonable time-bound approach on this issue.
  2. 15% investment allowance and 15% depreciation allowance for 5 years for industries setup in backward regions (7 districts of AP). This is not significant in any great manner.
  3. Special package to 7 backward districts of current Andhra Pradesh – Rs. 50 Crores were approved to be given to each backward district in February 2015 (Total 350 Crores). The union budget didn’t make any additional allocations and BGRF is discontinued. Granting 50 crs per district is like throwing change at a beggar.
  4. Polavaram – Central government promised Rs. 100 crore in 2015 budget against possible cost of tens of thousands of crores. After strong protests, the centre approved  additional release of Rs. 1000 crore by the end of the current financial year.
  5. There is persistent public campaign by Naidu government that state would still be in deficit after 2019 even after incorporating increased devolution to states (14thFinance Commission) and 5-year grants aimed at fixing deficit (14thFinance Commission).

Here is how things are panning out.

June 2 (At the time of state formation): revenue deficit of AP for fiscal 2014-15: 15691 crores

revenue surplus of Telangana: Rs. 3555 crores

Debt/loan burden of AP: Rs. 85000 crore

Telangana: 61000 crore

August 21, 2014 budget by AP state government:

Fiscal deficit for remaining part of FY: Rs.12064 crore

Revenue deficit of Rs 6064 crore (estimate for remaining part of the FY)

The estimates for revenue deficit is low as it includes promised allocation/assistance of Rs.14500 crore from Central government. Excluding this assistance, the revenue deficit stands at Rs. 20564 crore. In absence of Central assistance, fiscal deficit could reach 7.2% of GSDP.

March 11, 2015 Budget by AP Government for year 2015-16:

Projected revenue deficit: Rs. 7300 crore

Fiscal deficit projection: Rs. 17584 crore

Central Assistance as of date March 4, 2015:

  1. Centre has release Rs. 350 crores for special package to 7 backward districts
  2. 14thFinance Commission has provided following to the AP state:

– Grant of Rs. 2492 crore for disaster relief

– Grant of Rs. 8654 crore and Rs. 3635 crore for rural and urban local bodies

– Additional grant of Rs. 22113 crore over next 5 years to meet revenue deficit

– State allocation/share of Central taxes for 2015: Rs. 25037 crore

  1. Post-devolution revenue deficit as given by Finance commission is Rs. 6609 crore. This is covered by Finance Commission by offering multi-year grant of Rs. 22113 crore, of which Rs. 6609 crore is earmarked for year 2015. However, the state government insists that Finance Commission has not addressed the revenue deficit of Rs. 16000 crore. According to the state government calculation, under the current transfer terms, the state would still be in deficit of Rs. 2500 crore in the year 2019-20. 

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