The Hunt for the Special Category Status
The Story of the New Andhra Pradesh
Special category status to Andhra Pradesh has been promised during the state separation from Telangana. Apart from the special status, there were a number of promises from the Modi government which are yet to be sanctioned.
Statement of Prime Minister Dr. Manmohan singh on on 20.02.2014
Prime minister has announced in Rajya Sabha that newly formed state of Andhra Pradesh should be given special category status to put state finances in strong hold. He also told that resource gap for the year of 2014-2015 would be compensated by the Central Government.
Andhra Pradesh State was bifurcated with a ludicrously drafted bill by congress which was later passed by Parliament in a most undemocratic manner in Feb 2014. People voted for NDA alliance at Center and State hoping they would fulfill the promises made. The NDA government has presented 2 Union Budgets till date and 3 full budgets will follow before 2019 elections. Let us review the status of the commitments made, based on the budgetary allocations (for 22 months) and other actions.
“Special Category” Status: Status: Special class status was guaranteed for a long time in Parliament by the PM and affirmed by UPA bureau. BJP felt free to said that they would additionally expand the status by 5 years once they are in power.Special classification states get portions as 90% awards and 10% loans,Concession on extract obligation and so forth.
Special Package/Incentives: The parliament and UPA cabinet passed the implementation of a special package for the 7 backward districts for the state on the lines of other packages implemented in the past in Bundelkhand,MP,Orissa.15% additional depreciation on new plant and machinery setup in backward region. 15% investment allowance for industries setup in backward region. This is applicable for 5 years(2015-2020). The above allowance is futile, as the industry will only benefit once it becomes profitable.
Revenue deficit in 2014-15: Parliament and BJP guaranteed to satisfy the resource gap in first year budget before the fourteenth Finance commission suggestions were endorsed. The state has an income shortage of Rs 9,736 crore till end of Jan 2015. The State asked for a measure of Rs 15,691 crore. There was no allocation made in the 2014-15 union budget. Apparently Rs 50 cr each for 7 backward districts was approved in Feb 2015 for the year 2014-15 but in the budget 2015-16 it wasn’t even mention about the allocation. Moreover, the Backward Regions Grant Fund (BRGF) scheme is now discontinued and state has to bear this burden. Finance Ministry in the 2015-16 budget speech mentioned that they will provide special assistance to AP,Bihar and west Bengal. It needs to be seen if the Rs 20,000 crore allocated to NITI Aayog will be used for this purpose.
Polavaram Project: This multi-purpose dam on godavari waterway would inundate 7.2 lakh sections of land and give 80+ TMC water for the drinking purposes and industry purposes. In 2009 National water commission affirmed the venture at an expected cost of Rs 16,010 crore which has soar to Rs 20,000 cr by 2015. Since 2004 the state government has spent Rs 5,700 crore on the task. AP Reorganization act proclaimed Polavaram as a national venture. 50% of the canal work has been completed till date and the reservoir work has to start. Here, an ordinance was passed to merge villages from 7 mandals of Telangana to Andhra Pradesh before the appointed day(June 2nd 2014). ‘Polavaram Project Authority’ was setup and Dinesh Kumar was appointed as CEO in Dec 2014. After all of it no commitment has been made on the funds spent by the state government.
Budget Allocations:The budget allocated by the union ministry in 2014 -15 was Rs 250 cr and from 2015-16 Rs 100 cr which is not sufficient according the projects endorsed by the state in that span for the growth of the state. Anticipating a delay, the state government has embarked upon ‘Pattiseema lift irrigation’ to pump 70 TMC of water from Godavari to Krishna and plans to complete it in 2015.Whereas the State government has sent a report with estimates of Rs 20,935 crore for 5 years to develop the new capital. Act: Section 94(3) of the act.
Under the Reorganisation Act The government has to take care of the infrastructural development of the state where the report says that
- The government has to examine the expansion of Vizag,Vijayawada and Tirupati airports to international standards.
- A feasibility study for a greenfield oil refinery and Petrochemical complex within 6 months has to be completed.
- Vizag-Chennai Industrial Corridor feasibility should be completed [was mentioned in 2014-15 budget]
- Government should develop a new major port at Dugarajapatnam and complete Phase-1 by 2018
- The act directs to examine the establishment of a new railway zone for the state within 6 months and take an expeditious decision thereon.
Apart from this the other areas which are unrelated or outside the Reorganisation act , the government has made many false promises and many of the statement were just made to be into the limelight but later when the numbers doesn’t fit in; is the scenario when the curtains open and the mismatched accounts are popping up.
The promises were also breached when the city Vizag was selected as a Smart city. The united states also agreed to be a lead partner in developing the city. Krishnapatnam was selected in the previous budget. But no funds were allocated neither a single penny was utilized from the Rs 7000 cr allocated for smart city projects in country in 2014-15 budget. There wasn’t any clarity on the budget allocations in 2015-16. The state had also undergone to natural disasters which was responsible for huge loss . It was hit by a devastating cyclone (Hudhud) in 2014. The state received a relief package of Rs 737 crore. As per a UN study, AP and Orissa had a loss of $11 billion(approx Rs 67,000 crore) due to the cyclone.
Along with Rajasthan and delhi were selected for 24/7 Power projects pilot scheme. Apart from this NTPC will build 1000 MW solar projects and a 4000 MW thermal project. State and NTPC have signed MOU. but there hasn’t been any news any progress about it .
India consists of many states. Also, it has seen so many divided states asking for SCS but the central government should go through all the data required to analyze the situation. Also, the Centre should understand the main aim of giving a state the Special category status, as it would indirectly benefit the state by providing funds also helping the state to make an inclined growth proportional to the country growth. But these days all the states are somehow or the other campaigning to get the erstwhile SCS benefits, but there’s a need to understand that if the same is given to more than half of the states it is nowhere called Special. Also it will become difficult for the central to provide funds and it can’t withhold the revenue deficits when the SCS is given to more number of states as the whole funding is being reassigned to the other states.
Comparatively, after the bifurcation of AP into two different states Telangana and AP, it has seen a sequential loss not a suitable indicator of the country growth. Through the Constraint development in Manufacturing and industry sector, we can easily eradicate the poverty also. The idea of increasing literacy in a wide population helps the state to grow as it also builds the chance of opportunities for the upcoming generation who want to establish their career in a better and growing circumstances. By granting SCS to AP, the centre mainly increases its chances of making AP one of the best states in the coming future. Not only that, it also increases the power of increasing the country GDP to a whole new level. The main outcome of granting SCS to AP is seeing a dramatic growth in manufacturing and industry sector proportional to the national GDP.