Centre calls AP team to discuss special package: Times of India

modi vs chandrababuReproduced from Times Of India:

The Union finance ministry has asked the AP government to depute officials to Delhi to discuss alternative financial measures in lieu of the special category status. A team led by AP principal finance secretary PV Ramesh will leave for New Delhi in a couple of days to discuss special package and financial assistance to the bifurcated state.

The state government is busy preparing the details sought by the Centre and is also preparing an alternative plan on immediate financial assistance. The team will also discuss the need for special category status.

The state government had earlier sought additional funding apart from what was already allotted by the finance commission. The 14th Finan ce Commission had recommended Rs 2, 06,911 crore including Rs 1,70,686 crore as its share in Union taxes during 2015-20. For 2016-17, the state government was assured Rs 26,850 crore in the form of Central grants and Rs 24,637 crore as state’s share in the Union taxes.

The state government decided to press for special funds citing revenue deficit, backward district development, creation of industrial and education hubs and augmenting the infrastructure.Tax incentives for a period of 10 years in the specified industrial and manufacturing zones, and tax holidays for mega projects including tourism are some of the proposals to be submitted to the Centre. “Post devolution, we were assured of Rs 22,112 crore assistance to overcome the revenue deficit in next five ye ars. Of this, only Rs 7,000 crore was released. We are going to demand more funds to handle the severe financial crunch,“ said an official.

Citing Hyderabad as a major revenue and employment generator, the Andhra Pradesh government pointed that about 80 per cent of new jobs and 60 per cent of fresh investments are coming from the city . It also pointed out that the burden of building a new capital in record three years is also pushing the state finances under stress.

“The special status is vital to the state. It is financial aid given to states that fit specific criteria and most of the funds come as grant. Even external financial aid could be turned into grant once special status is given to the state. This will provide great relief to the state and industrialization will also pick up in the state,“ Ramesh told TOI.

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