Centre announces financial package for Andhra Pradesh but no special category status

The Central government on Wednesday decided to provide special assistance to Andhra Pradesh.

Centre announces financial package for Andhra Pradesh but no special category status
File photo

Delhi: The Central government on Wednesday night announced a financial package for Andhra Pradesh but stopped short of giving the state a special category status.

Andhra Pradesh will get a railway zone as also all cost incurred on the irrigation part of Pollavaram project from the date it was declared a National Project on April 1, 2014 will be funded by the Centre.

The state government will, however, implement the project, Union Finance Minister Arun Jaitley at a late night press conference hours before the Andhra Pradesh Assembly is to meet.

Citing constraints placed by the 14th Finance Commission in grant of special category status to Andhra Pradesh, he said an amount equivalent to what that categorication would have fetched, would be given to the state in form of a Special Assistance Measure for five years.

This will be in form of form of externally aided project, he said, adding the state would also get two tax concessions, details of which will be notified by the CBDT shortly.

Jaitley said, "Special Assistance Measure for AP announced to give the state an amount equivalent of what it would have got if special category status was granted. Special Assistance Measure for Andhra Pradesh will be in form of externally aided projects."

"As on 1.4.14 from which date it (Polavaram Project) becomes national project, funding from that date onwards is going to be met by the Centre. Andhra Pradesh to get two tax concessions," he added.

On the other hand, Union Urban Development Minister Venkaiah Naidu said, "Andhra Pradesh will be considered as a special state and all the support is being extended from Centre. Andhra needs hand-holding by Centre, in view of the disadvantage it has got because of the way the state was bifurcated. 

Earlier, on a day filled with high political drama in Vijayawada and New Delhi, hectic parleys were held between the state and the Central government representatives on what should be granted to AP.

Chandrababu turned down an invitation from Naidu to fly down to New Delhi to finalise the special package before Jaitley made a formal announcement.

Instead, the CM constantly discussed, over phone from Vijayawada, the Centre's reported offer with his pointsmen in New Delhi - Union Minister of State Y Satyanarayana Chowdary and Rajya Sabha member C M Ramesh - and conveyed his response to Union Ministers Rajnath Singh, Venkaiah Naidu and Arun Jaitley.

Andhra Pradesh has been demanding a Special Category State (SCS) status from the Centre ever since the state's economic powerhouse Hyderabad, which housed several IT and pharmaceutical companies as well as PSUs, went to Telengana in the bifurcation in June 2014.

While the Andhra Pradesh Reorganisation Act does not mention of SCS for the state, the then PM Manmohan Singh had on the floor of Rajya Sabha on February 20, 2014 promised to grant the status to the state for five years.

(With Agency inputs)

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