Chandrababu Naidu Rocks the NDA Boat

Chinks in the BJP-led NDA alliance emerged on Wednesday when Telugu Desam Party leader Chandrababu Naidu took his party out of the Central government over the issue of 'special category status' not being granted to Andhra Pradesh. Mr. Naidu said the party would take a decision on leaving the alliance before the second part of the Budget session of Parliament ends on April 6. The TDP, which left the NDA in 2004, rejoined the alliance in April 2014 and has two ministers in the Cabinet – Civil Aviation Minister Ashok Gajapathi Raju and Minster of State for Science and Technology Y.S. Chowdary. On Thursday, the two BJP Ministers in Mr. Naidu's Cabinet resigned in response.

The demand for special category status emerged in 2014 after the bifurcation of the State and the creation of Telangana. The then Prime Minister Manmohan Singh said in the Rajya Sabha that special category status would be extended to Andhra Pradesh for five years. The demand has been consistently  raised by political parties and the people of the State, who have protested in a variety of ways, but has been ignored by the Centre. This is despite the BJP promising during the 2014 Lok Sabha polls that special status would be granted. Matters came to a head when the 2018 budget too did not have a mention of it. Leader of the Opposition in Andhra Pradesh Y.S. Jaganmohan Reddy threatened to have MPs from his and Y.S.R. Congress Party resign if the demand was not accepted. Opposition parties, including the YSR Congress, the CPI(M) and the CPI have held multiple protests over the years on the issue.

The granting of special status to a State would, among other things, imply that the Centre provides 90% of the funds in schemes sponsored by it as opposed to 60% in other cases. Currently, 11 States fall under the category. The Centre's logic in denying the demand has been that in the aftermath of the 14th Finance Commission report, the grant of special category status is no longer feasible. It has instead proposed to provide special assistance, which would be in monetary terms, the equivalent of what is given to a special category State. It has also suggested the setting up of a Special Purpose Vehicle, which would enable the A.P. government to raise funds from bodies like NABARD. Union Finance Minister Arun Jaitley has accused the State of modifying its demands on the issue.

Amid the trading of accusations, the State's finances continue to suffer. The State has a fiscal deficit of Rs 28,157.84 crore. The State also claims it has so far not received anything under the Central GST yet and has claimed that aids-in grant from Centre are also lagging. These are of vital importance at a time when States' finances have been severely affected in the aftermath of the imposition of the GST regime.

The move has significant implications at the national level The  TDP and the BJP have 17 of the 25 Lok Sabha seats from  the State.  The solidifying of resentment against the BJP could cost it dearly in a State which the party was counting on for the 2019 elections. In neighbouring Telangana, Chief Minister and Telangana Rashtriya Samiti leader K. Chandrashekara Rao has mooted the idea of a non-BJP, non-Congress front for the Lok Sabha polls. At a time when the BSP's support for the SP in the upcoming Phulpur and Gorakhpur bypolls in Uttar Pradesh raises interesting possibilities for the Lok Sabha polls, the loss of a key ally in Andhra Pradesh could hurt the BJP's prospects at the natiional level. As for Mr. Naidu, the move is a desperate attempt to  take away the wind from the sails of the Opposition, which has managed successful mobilisations on the issue. However, he risks criticism of the move being merely cosmetic in the wake of his actually not leaving the alliance.

It remains to be seen in the coming days if Mr. Naidu, who prided on being a friend of big business but whose economic policies were resoundingly rejected in the 2004 Legislative Assembly elections, is willing to take his decision to its natural conclusion. The BJP faces tough times ahead with all key parties taking a stand against it and public sentiment too strongly against it for ignoring the wishes of the people of the State.