Here Is Andhra Pradesh’s Case For Demanding Assistance From The Centre
Denying rightful assistance to Andhra Pradesh would not only impede its development, but will also stall several crucial projects.
It would be violating the spirit of cooperative federalism and setting a dangerous precedent in a democracy like ours.
The Telugu Desam Party (TDP)’s move to pull out from the Bharatiya Janata Party (BJP) coalition is a distress call made by Andhra Pradesh Chief Minister N Chandrababu Naidu following the rise in anti-BJP sentiment in the state due to unfulfilled promises.
The ground reality in Andhra Pradesh with respect to the promises made in the AP Reorganisation Act, 2014, need to be examined and stated clearly, without seeing it merely as a political move.
Congress and BJP gimmicks on special status
The Special Category status was promised by former prime minister Manmohan Singh on the floor of Rajya Sabha, without making it a part of the Andhra Pradesh Reorganisation Bill. While the Congress conveniently got away with stating that it would help in implementing the “special status” promise, it cleverly skipped that point in the Bill.
Meanwhile, M Venkaiah Naidu and Arun Jaitley of the BJP only managed to get an assurance from the United Progressive Alliance (UPA) government at the time of bifurcation, but could not compel them to include the special status provision in the Bill. However, the BJP made public statements about implementing the promise, trying to pacify the people of Andhra, who were seething with anger after an unwilling bifurcation.
During his election campaign tour in May 2014 in Andhra Pradesh, Prime Minister Narendra Modi had promised that the BJP government would support the development of the state and the construction of its new capital. In the 2015-16 budget session, the Fourteenth Finance Commission came up with a revamped policy of higher devolution of central tax revenues to the states and declared that it would allocate Rs 22,113 crore to the state to fill the revenue resource gap over a period of five years (2015-2020).
Even considering this assistance from the Centre to Andhra Pradesh, the state would still face a net yearly loss of thousands of crores when compared to other states with surplus revenue. This is one of the reasons why the state requires additional financial assistance for the next 10 years to boost its revenues at par with other progressive states (Clause 46 (2) and (3) of the AP Reorganisation Act).
In an attempt to convince its strongest ally in the south, the National Democratic Alliance (NDA) government in September 2016, after refusing to grant special status, came up with another bait called “Special Assistance”, including the provisions to be fulfilled in the Act, an initiative coordinated by then minister Venkaiah Naidu and Finance Minister Jaitley with Chandrababu Naidu. Despite facing backlash from the Opposition, Naidu accepted it and made an attempt to convince the people of Andhra Pradesh.
Centre vs state: facts from the ground
Revenue deficit: For instance, if one considers the revenue deficit, the Comptroller and Auditor General (CAG) had certified that Andhra Pradesh’s revenue deficit for fiscal year 2014-15 is Rs 15,691 crore (approximately Rs 16,000 crore). Later, the Centre came up with a trimmed revenue deficit figure of Rs 4,000 crore, with the same CAG’s analysis.
While respecting the CAG’s analysis of the revenue deficit pegged at Rs 16,000 crore, the Centre has so far released a mere Rs 3,800 crore, which is a pittance.
Educational institutions: If one considers the case of educational institutions as promised in the Thirteenth Schedule of the Act, nine of the 11 institutions are working from a temporary campus as against a “permanent campus”, as mentioned in the Act. For example, the state government has given Rs 1,708.30 crore for setting up an Indian Institute of Technology in terms of land value and funds for compound construction. However, the government of India has released only Rs 100.93 crore till now, which is barely 3 per cent of the required funds.
Going by this pace, the permanent campus requires 30 years to be self-sustaining. The same is the case with other institutions.
Infrastructure: Another misrepresentation of the Centre is about establishing a Vizag-Chennai industrial corridor (VCIC) along the lines of Delhi-Mumbai Industrial Corridor. In the very first phase, the 800km-long VCIC segment of the East Coast Economic Corridor was taken up, where the Asian Development Bank had disbursed Rs 125 crore, as against Rs 2,500 crore claimed by the Centre, while Rs 413 crore is yet to be received.
Oil and gas: According to the Centre, a major investment of nearly Rs 1.4 lakh crore is being made by Hindustan Petroleum Corporation Limited, Gas Authority of India Limited, and Oil and Natural Gas Corporation (ONGC). This will make Andhra Pradesh a major petrochemical hub in the coming years. This explanation runs into deep difficulty because ONGC is a commercial organisation and an offshore facility that doesn’t contribute any royalty despite using all the landing facilities of the state. Therefore, this is a revenue-negative project for the state.
Vizag Steel Plant and Railway Zone: The Centre says the expansion of Vizag Steel Plant with an outlay of Rs 38,500 crore will benefit the state. Unfortunately, the detailed project report (DPR) for this expansion, which was to ready by January 2018, is still awaited by the state. While this is the case with Andhra Pradesh, projects like Bengaluru suburban network, which still doesn’t have a DPR, has got Rs 17,000 crore fund allocation in the recent Union budget. The TDP has been demanding a Railway Zone in Visakhapatnam, which is part of the Thirteenth Schedule of the Act, still in limbo.
Violating the spirit of cooperative federalism
Even if one doesn’t consider the demand for a special status, the promises made in the Act for the Polavaram project and the financial assistance for Amaravati have not been fulfilled due to the Centre’s apathy towards Andhra Pradesh, despite a four-year wait. If one goes by the political situation, neither the BJP nor the Congress has chances in the state, given the current anti-Modi sentiment.
As Andhra Pradesh has a history of being one of India’s more progressive states, denying rightful assistance to the state would not only impede its development, but will also stall several crucial projects such as the Polavaram project, which could drought-proof the Rayalaseema region, the AP Fiber Grid project, which provides internet to every household at an affordable price, and the e-Pragathi project, which is the first of its kind in the country.
This row surrounding the bitterness of relations between the Centre and Andhra Pradesh is an example of the Centre violating the spirit of cooperative federalism. It can set a dangerous precedent in a democracy like ours, where the south, which is not a BJP stronghold, gets a pittance.
As you are no doubt aware, Swarajya is a media product that is directly dependent on support from its readers in the form of subscriptions. We do not have the muscle and backing of a large media conglomerate nor are we playing for the large advertisement sweep-stake.
Our business model is you and your subscription. And in challenging times like these, we need your support now more than ever.
We deliver over 10 - 15 high quality articles with expert insights and views. From 7AM in the morning to 10PM late night we operate to ensure you, the reader, get to see what is just right.
Becoming a Patron or a subscriber for as little as Rs 1200/year is the best way you can support our efforts.