Andhra special status row: Real reason why Chandrababu Naidu may be parting ways with BJP

  • Prabhash K Dutta
  • New Delhi
  • March 8, 2018
  • UPDATED 07:43 IST

HIGHLIGHTS

  • TDP has been demanding for special status category to Andhra Pradesh.
  • Centre is ready to pay an equal amount of money to Andhra Pradesh as special package.
  • TDP and its party chief have decided to sever ties with BJP.
TDP chief and Andhra Pradesh Chief Minister Chandrababu Naidu (Twitter/@ncbn)

HIGHLIGHTS

  • TDP has been demanding for special status category to Andhra Pradesh.
  • Centre is ready to pay an equal amount of money to Andhra Pradesh as special package.
  • TDP and its party chief have decided to sever ties with BJP.

Politics and sentiment don't decide the quantum of funds that a state gets from the Centre which is done in accordance with the constitutional award decided by the Finance Commission, said Finance Minister Arun Jaitley today on a query relating to Telugu Desam Party's (TDP) demand for granting special category status to Andhra Pradesh.

"...Centre does not have free floating funds. Every state in India has a right to same Central funds in the same manner. I have been sympathetic to AP because I know it suffered due to bifurcation," he added.

Jaitley's remark is significant considering that under pressure from the MLAs and MPs of the TDP, party president and Andhra Pradesh Chief Minister N Chandrababu Naidu has decided to sever ties with the BJP and walk out of the ruling National Democratic Alliance (NDA).

The TDP has been agitating for special category status for Andhra Pradesh as promised by the previous Congress-led United Progressive Alliance (UPA) government at the time of bifurcation of the state to carve out a separate state of Telangana.

Jaitley categorically rejected the demand of special category status saying that "we have to think of the country as a whole". There are other states that are earning less revenue than Andhra Pradesh, Jaitley said. The Centre is ready to pay an equal amount of money to Andhra Pradesh as special package.

The TDP could not have agreed to it for two reasons - its fiscal mess and secondly, the cascading adverse political impact of financial stress. Naidu and TDP can't afford to be seen losing the battle politically as Andhra Pradesh will go to the polls next year around the same time as Lok Sabha elections.

TDP-BJP BREAK UP EXPLAINED IN 10 POINTS

Andhra Pradesh is facing a situation of continued massive revenue deficit - Rs 16,000 crore for 2014-15, Rs 4,598 crore in 2016-17, and Rs 14,682 in 2017-18. The revenue deficit for the is estimated to be Rs 416 crore for 2018-19.
The TDP says that the deficit has occurred due to bifurcation of the state and the Centre must compensate for its losses. However, there is another argument that Andhra Pradesh has higher revenue deficit because it included Rs 10,000 crore given as farm loan waivers in its calculation.
On the other hand, Jaitley said under the original scheme of bifurcation, the Centre has already given large part of the fund due to Andhra Pradesh. "Only Rs 139 crore is remaining," he said. The Centre has paid Rs 4000 crore to Andhra Pradesh.
Then there is Polavaram project. It is a multi-purpose irrigation project that was first proposed in 1941 but construction began only in 2004. It is set to be inaugurated in 2019, a deadline that is most likely to be missed.
The Polavaram project is estimated to cost Rs 33,000 crore including the cost of rehabilitation. Around Rs 7,500 crore have been spent till now on the project. The Centre has given around 4,660 crore for the project's construction.
Andhra Pradesh government has borrowed some Rs 3,000 crore for which bit is paying an annual interest of Rs 300 putting burden on it's finances. TDP seekingmore money from the Centre to meet the cost.
Andhra Pradesh's insistence on special category status would have eased financial burden of Naidu government. Under special category status, a state gets Centre's assistance in the ratio of 90:10 (Union : State) for all externally aided and centrally sponsored projects much above the Finance Commission mandated 60:40 ratio.
At the time of bifurcation of Andhra Pradesh, the then Prime Minister Manmohan Singh had promised "special assistance" for five years. TDP is alleging that Andhra Pradesh is being denied what was promised to it. Jaitley cited Finance Commission recommendation as the constitutional limitation for acceding to TDP's demands.
There is also difference in the way TDP and BJP-led central government calculate the money that Andhra Pradesh may get. According to TDP, Andhra Pradesh should get Rs 20,000 additional funds for it's projects. However, Jaitley made it clear that under the existing formula, Andhra Pradesh can't get more than Rs 1,600 crore, an amount that TDP considers insufficient.
The lack of fund is also hampering other projects undertaken by the Naidu government, for example, construction of a new capital at Amaravati which is likely to cost Rs 33,000 crore. The Centre has given Us 2,500 crore. TDP wants Centre to bear the entire cost saying it didn't ask for bifurcation. With election fast approaching, TDP finds it more convenient to face electorate as a martyr than a failure.

Watch: Chandrababu Naidu: TDP ministers will quit because Centre didnt fulfill promises

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