Two years after coming into existence as a separate state, Andhra Pradesh has got special assistance from Centre on Wednesday.
In a late night announcement made after daylong consultations with officials of Finance Minister, AP Chief Ministers Office, Union government has made the announcement.
As per the announcement, Andhra Pradesh, which financially suffered because of creation of separate state of Telengana in June 2014, will now get a railway zone as also all cost incurred on the irrigation part of Polavaram project from the date it was declared a National Project on April 1, 2014 will be funded by the Centre.
“This will be in form of form of externally aided project, adding the state would also get two tax concessions, details of which will be notified by the CBDT shortly,” said Finance Minister Jaitley.
The Special assistance includes financial support, including full funding of Polavaram irrigation project, tax concessions and a special assistance to development activities.
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 categorisation would have fetched, would be given to the state in form of a Special Assistance Measure for five years.
While the Andhra Pradesh Reorganisation Act does not mention of SCS for the state, the then Prime Minister Manmohan Singh had on the floor of Rajya Sabha on February 20, 2014 promised to grant the status to the state for five year
“Since the advantage of what they get by virtue of the former Prime Minister’s statement is the monetary advantage, we have decided to give special assistance measure for Andhra Pradesh wherein an amount equivalent to what they would have got if that statement could have been implemented would be compensated to the state by virtue of externally aided projects which otherwise state would have paid for,” he said.
Jaitley said that the package will be valid for 5 years and will end in 2020.
Meanwhile in Vijayawada, Chief Minister N Chandrababu Naidu welcomed Finance Jaitley’s announcement of a financial package for Andhra Pradesh and said he would have been happier had the Centre granted special status to the state.
“People of the state have been waiting for this for many days now…Had they granted special status, I would have been happier. In case they have some technical problems, they should do whatever is possible as per law,” Said Chandra Babu
Naidu demanded that the Centre expedite the work on the Polavaram project and complete it in a time-bound manner.
With respect to the construction of capital city Amaravati, he said Rs 2500 crore already been sanctioned and another Rs 1000 crore promised would not be in any way sufficient.
“The Centre should do justice in this regard,” he added.
Jaitley’s announcement came after the draft of it was ostensibly approved by Chief Minister N Chandrababu Naidu.
However opposition parties in the state criticised Jaitley’s announcement, saying there was “nothing” in it.
“It’s a clear betrayal by BJP. This will be a black day in the history,” said CPI state secretary K Ramakrishna said.
The concept of SCS was first introduced in 1969 when the 5th Finance Commission sought to provide certain disadvantaged states with preferential treatment in the form of central assistance and tax breaks.
To begin with, Assam, Nagaland and Jammu & Kashmir enjoyed the status but later eight states of Arunachal Pradesh, Himachal Pradesh, Manipur, Meghalaya, Mizoram, Sikkim, Tripura and Uttarakhand were added.
A special status, which gives preferential treatment in getting central funds assistance, is given to a state if it is in a hilly and difficult terrain, strategic located along the borders of the country, has low population density, has economic and infrastructure inadequacies and financial unviabililty.
Besides Andhra Pradesh, other states including Bihar, Jharkhand, Chattisgarh and Odisha have also sought the Special Category State status.