Andhra Pradesh has been demanding a Special Category State (SCS) status from Centre ever since it was decided to carve out Telangana along with capital city Hyderabad. State-wide protests, slogan-shouting in Parliament, a Private Member Bill and intense lobbying have not resulted in a favourable decision yet.
Special Category State status
Before getting into the issue, let us look into what the SCS means. Fifth Finance Commission introduced SCS in 1969 giving Jammu and Kashmir, Assam, and Nagaland additional Central assistance and tax concessions. The National Development Council (NDC) laid five guidelines to grant the status — hilly and difficult terrain; low population density or sizable share of tribal population; strategic location along borders with neighbouring countries; economic and infrastructural backwardness; and non-viable nature of State finances. Eventually eight more States were added to the list — Arunachal Pradesh, Himachal Pradesh, Manipur, Meghalaya, Mizoram, Sikkim, Tripura and Uttarakhand.
The SCS are allotted 30 per cent of Normal Central Assistance and the remaining 70 per cent is split among other States based on their population, per capita income and fiscal performance. The SCS enjoy concessions in excise and customs duties and income tax rates. In addition to this, the Plan panel may allot more funds to these States to carry out centrally-sponsored schemes (CCS) and special projects, if any. The SCS will have to spend 10 per cent for CCS, while the rest will be borne by Centre.
Bifurcation of Andhra Pradesh
Back to Andhra’s case, the State lost its capital to Telangana and with that it lost its considerable chunk of revenue. Prior to the bifurcation, >Hyderabad alone was generating Rs.70,548 crore as revenue.
Before the 2014 Lok Sabha elections the then Prime Minister Manmohan Singh assured that the Seemandhra (a term used to refer coastal Andhra and Rayalaseema districts) region will be granted SCS status for a five-year period.
But the assurance was only oral. The bill that eventually turned into law assured central assistance to develop a new capital for Andhra Pradesh, a separate High Court, ports and other infrastructure, and Centre would sponsor the Polavaram Irrigation Project but did not have any mention on SCS status.
The post-General Election scenario
When Dr. Singh spoke in the Rajya Sabha about SCS status to Andhra Pradesh, Union Parliamentary Affairs Minister M. Venkaiah Naidu was then in Opposition. He demanded the status to be extended to 10 years, since the Andhra Pradesh State Reorganisation Bill mandates Hyderabad to be the common capital for both States for 10 years. But general elections in 2014 changed the parliamentary equation. Those who were in Opposition are the ruling party now.
In the State, Telugu Desam Party that forged an alliance with the BJP wrest the power. It independently formed the government and continues to be in NDA. Andhra Pradesh Chief Minister N. Chandrababu Naidu had big plans for the State and expected his ally at the Centre would support him.
The NDA government moved amendments to the Act, but that was to seek approval to create separate Legislative Councils in both the States and a bill for Polavaram project. Again, there was no mention on granting special status.
Private Member Bill
At this juncture, K.V.P. Ramchandra Rao, a Rajya Sabha member representing Congress >moved a private member Bill seeking special status to Andhra Pradesh.
During a short duration discussion in Rajya Sabha, Finance Minister Arun Jaitley said that instead of allotting it a special constitutional entitlement, >the government would “handhold” Andhra Pradesh until it became economically stable.
“Forty-two per cent of the Central revenue goes to States. The rest 58% has to take care of defence, salaries, loans... We also have to support Central schemes. After that, the Central government has a deficit. This year, it is 3.9%,” Mr. Jaitley said.
The question of ‘backwardness’ of a State has always been a matter of debate. A good number of States including Bihar, Jharkhand and Odisha have been demanding the status but the successive governments have categorically rejected such claims. If one State is granted this status now, it will trigger more demands from other States. Though the TRS has not sought it now, there is a chance of it demanding an SCS status considering it is the newest State in the country.
Andhra Pradesh meets only one of the five guidelines to grant a special category. After the era of Planning Commission ended and NITI Aayog took over, there has been a drastic cut in the allocation to CCS and the difference between funds allotted to SCS and other States have been sizably reduced.
It is obvious that what now remains in the status is political mileage. If Centre allots additional funds without naming the State as a SCS, the BJP would stake claim for it. But, this may earn the wrath of neighbouring States. Tamil Nadu Chief Minister Jayalalithaa had already shot off a letter >asking Centre to “exercise greatest care” in this regard.
Though the Congress, YSRC and other Opposition parties in A.P. are accusing the TDP of going soft on the SCS demand, the latter too will claim credit if such a status is granted.
(with inputs from Ramesh Susarla)