Relations between NDA ally Telugu Desam Party and the Bharatiya Janata Party took a turn for the worse, with Finance Minister Arun Jaitley — while asserting the Centre’s commitment to providing a special package — passing the blame on to Andhra Pradesh for shifting the stand on the mode of transfer of this money.
This is the first time that the BJP government held a press briefing on the issue.
Mr. Jaitley addressed the media minutes after Andhra Pradesh Chief Minister N. Chandrababu Naidu ended his speech in the Assembly, detailing his grievances with the Centre.
“We are committed to giving monetary equivalent of a special status to Andhra Pradesh. We are awaiting a response from the Andhra Pradesh government,” Mr. Jaitley said. Just because it is a political issue, the quantum of assistance can’t be increased, he said.
This leaves the TDP with little elbow room to carry on with protests while remaining with the BJP government.
Citing the 14th Finance Commission, the Finance Minister said the category of “special status” no longer exists. Therefore, Andhra Pradesh can no longer be put in that category.
The special status used to be originally granted to States in the northeast because their own revenue was inadequate. In the case of any Centrally sponsored programme or scheme, the Centre pays 60% of the amount and the State pays 40%, he said.
The States enjoying ‘special status’ only have to pay 10% of this contribution.
Mr. Jaitley said the TDP’s contention that the division left Andhra Pradesh at a disadvantage is fair.
He, however, claimed that the problem is how to transfer this fund to the State.
The Andhra Pradesh government, he said, initially wanted this assistance to be routed as loans through external agencies like the World Bank and the Asian Development Bank. Under this, the Union government would have paid 90% of the loans.
“This January they modified the request. Instead of externally aided projects, they asked us to provide funds through NABARD loan,” Mr. Jaitley said.
“It is almost as if the Union government is waiting to pay the funds but is waiting for a bank account number,” he added.
