No special status for Andhra, Centre promises compensation

Making it clear that Andhra Pradesh will not be accorded special category status, the Centre on Wednesday said the state will be provided monetary compensation through externally aided projects.

After day-long suspense and hectic consultation in the national capital, Union Finance Minister Arun Jaitley announced on Wednesday night that the state will get monetary advantage equivalent to what it would have got if it was accorded the special category status.

Jaitley made it clear that then Prime Minister Manmohan Singh's statement made in Rajya Sabha on Feb 20, 2014 for according special status to Andhra Pradesh can't be implemented as the 14th Finance Commission has recommended that the special category status can be given to only hill states and North-Eastern states.

"We have decided to give a special assistance measure for the state of Andhra Pradesh wherein an amount equivalent to what they would have got if that statement could have been implemented, will be compensated to the state by virtue of externally aided projects," he said without giving any figure.

Jaitley, who was accompanied by central ministers M. Venkaiah Naidu and Y.S. Chowdary, said this special assistance will be for five years -- 2015-2020.

On Polavarm irrigation project, he said from April 1, 2014 when it was declared a national project, the entire funding will be met by the Centre.

The Finance Minister said the issues of a railway zone, steel plant, delimitation of assembly constituencies and assistance for Chennai-Bengaluru and Visakhapatnam-Chennai corridors were under consideration of the concerned ministries.

He promised that the Centre will honour in letter and spirit every commitment made in Andhra Pradesh Reorganisation Act.

Jaitley said the Centre already released Rs 3,975 crore towards revenue deficit of 2014-15 and balance will be released in instalments. "We have already given Rs 2,500 crore as support for the state capital. A further amount of Rs 1,050 crore has been given for backward area grants," he said.

Stating that there is a whole list of central institutions which have to be established in Andhra, he said some have started functioning while others will start functioning.

He said the Central Board of Direct Taxes (CBDT) would issue notifications forthwith with regard to two tax concessions -- one with regard to accelerated depreciation and other investment allowance.

He noted that 14th Finance Commission also made some recommendations with regard to revenue deficit from 2015 till 2020. "Revenue deficit for first two years paid up to date and of course 42 per cent share is also being paid.

The announcement came after day-long consultations Chowdary and other leaders of Telugu Desam Party (TDP) had with Jaitley, Venkaiah Naidu and other central ministers.

It was a disappointment for TDP, a part of the BJP-led NDA government at the Centre. The party was expecting a massive financial package for the state, if not the special category status.

TDP President and Andhra Pradesh Chief Minister N. Chandrababu Naidu went into a huddle with his cabinet colleagues and top party leaders in Vijayawada.

--IANS

ms/lok