Andhra Pradesh Roiled by Anger Over Denial of Special Category Status

As the second phase of Parliament’s Budget Session commenced on 5 March, Andhra Pradesh MPs led protests in both Lok Sabha and Rajya Sabha demanding Special Category status to their state. Since the bifurcation of erstwhile Andhra Pradesh in 2014, the issue of ‘Special Category Status’ for the successor Andhra Pradesh has remained a significant concern for both the public and also political parties in the state. Though the ruling Telugu Desam Party (TDP) is part of the National Democratic Alliance (NDA) that rules at the Centre, its leaders are protesting against the central government for “neglecting Andhra Pradesh”.

In February, Chief Minister N Chandra Babu Naidu even threatened to bring a no-confidence motion against the central government for not implementing the “provisions of the AP Reorganisation Act, 2014”. The Act mandates the centre to support the state in setting up ports, industrial complexes, infrastructure for the new capital city, irrigation projects, a railway zone and educational institutes.

Reportedly, almost 95% of the assets of the erstwhile Andhra Pradesh have gone to Telangana in the bifurcation as they are located in Hyderabad, which caused a huge revenue deficit for the successor Andhra Pradesh state. As per the estimation of the newly formed AP government, from June 2014 to March 2015, Rs 16078 crores was calculated as revenue deficit. Of this, the central government assured to pay Rs 4117 crores but so far it has released Rs 3979.5 Crores.

When the bifurcation process was ongoing, the Union Cabinet of the previous United Progressive Alliance (UPA) government decided to bestow Special Category Status to the successor state of Andhra Pradesh. However, subsequently, the 14th Finance Commission brought in various changes which subsumed some of the earlier provisions of special category states. Stating this as the reason, the central government denied special category status to AP and instead, assured “special assistance” by promising a ‘special package’ in 2016, to be valid from 2015 to 2020.

Accordingly, in the component of centrally sponsored schemes, an amount of Rs 16447 crores was mutually agreed upon between the central and state governments. As no funds have been released under this agreement and as there was no mention of releasing special package funds to AP in the Union Budget 2018-2019, the political consensus in Andhra Pradesh has now again become focused on special category status.

With the obvious rift between central and state governments, the opposition parties in the state including YSR Congress party, Congress and CPI(M), have been organizing agitations, rallies and so on across the state demanding special category status.

Currently, eleven states - Jammu and Kashmir, Arunachal Pradesh, Assam, Nagaland, Himachal Pradesh, Manipur, Meghalaya, Mizoram, Sikkim, Tripura and Uttarakhand are the special category states. Accordingly, among the benefits claimed by these states are funding of centrally sponsored schemes and Externally Aided Projects (EAP) under 90:10 (Centre: State) fund sharing basis, fiscal incentives, infrastructure support and other such concessions.