Government says it has addressed all commitments made to Andhra Pradesh

• Rakesh Dubbudu

While the demand for a Special Category Status to Andhra Pradesh continues, the Government of India (GoI) has released a note detailing all the assistance it has already provided and it is planning to provide the state of Andhra Pradesh

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Amidst demands for a ‘Special Category Status’ to Andhra Pradesh, the Government of India (GoI) has released  a note detailing the various commitments made to Andhra Pradesh and how it has effectively addressed all of them. GoI has in no uncertain terms said that a Special Category Status for Andhra Pradesh is not possible because of the recommendations of the 14th Finance Commission. The GoI said that class of special category states ceases to exist.

Commitments made under different Acts & Reports

GoI has categorized the various commitments made to Andhra Pradesh into the following,

Commitments made in the Andhra Pradesh Reorganization Act

• Extend awards to successor States based on 14th Finance Commission recommendations & resources available.
• Provide a developmental package to the backward areas of the State of Andhra Pradesh & provide adequate incentives for Rayalaseema and north coastal regions of the State.
• Declares Polavaram Irrigation Project as a National Project.
• Institutions and infrastructure to be developed in the State are outlined
• Provides for appropriate fiscal measures, including offer of tax incentives, to be given to the Successor States to promote industrialization and economic growth.  Also provides for support to programmes for backward areas including physical and social infrastructure.  

Statement of the then Prime Minister Dr. Manmohan Singh on 20.2.2014

The then Prime Minister, Dr. Manmohan Singh on 20.2.2014 stated before the Rajya Sabha that Special Category Status would be extended to the State of Andhra Pradesh for a period of five years.  This would be done to put the State’s finances on a firmer footing.  He further stated that the resource gap for the year 2014-15 would be compensated by the Central Government.

Fourteenth Finance Commission:

Andhra Pradesh was one of the States determined to be a revenue deficit State, and the Commission recommended that the Centre would provide revenue deficit grant for the period of the Fourteenth Finance Commission.  The amount of deficit for each year was mentioned in the report itself and a total of Rs.22,113 crores is to be paid to Andhra Pradesh as revenue deficit grant for the 5 year period.

Report on Developmental Support to Andhra Pradesh dated 1.12.2015

The Vice Chairman, NITI Aayog Dr. Arvind Panagariya studied various aspects of the support to be given to Andhra Pradesh under the Reorganisation Act and made recommendations regarding effective implementation.

What did the GoI do?

 As per the press release of GoI, the following support has already been extended or committed.

• A part of the revenue gap compensation amounting to Rs.3,979.5 crore has already been paid and the balance is being paid in annual instalments.
• An amount of Rs.2,500 crore has already been paid as support for creation of new capital of State of Andhra Pradesh and a balance of Rs.1,000 crore would be paid in due course.
• An amount of Rs.1,050 crore has been disbursed as special package for backward areas  and a further amount of Rs.1,050 crore would be paid in the coming years.
• For the Polavaram Project, an expenditure of Rs.5,135.87 crore had been incurred up to 31st March 2014 including Central Assistance of Rs.562.469 crore. GoI will now provide 100% of the remaining cost of the irrigation component only of the project for the period starting from 1.4.2014, to the extent of the cost of the irrigation component on that date.
• Government of India has already legislated for fiscal incentives of enhanced investment allowance and accelerated depreciation.  They will come into effect once notified, after the State of Andhra Pradesh identifies the eligible backward areas.
• Many new educational & other institutions have been established
  • A Petroleum University has already been established. 
  • The IIT has already been functioning from a transit campus and the main campus is being constructed. 
  • The NIT has already been functioning since September 2015 in a temporary campus and its main campus is being constructed. 
  • The IIIT Kurnool has already started functioning from the temporary campus and would start functioning and its main campus is being constructed. 
  • The site for the Central University in Anantapur district has already been selected. 
  • The IISER has been established in Tirupati. 
  • The IIM  has been established at Visakhapatnam.
  • An AIIMS has been approved at Guntur and the land for the same is being taken over. 
  • A Tribal University is to be established in the State of Andhra Pradesh for which a Site Selection Committee of the State has already approved the land. 
  • A National Institute of Disaster Management is being established in the State of Andhra Pradesh for which identification and takeover of the land is being completed. 

• The Cabinet Committee on Economic Affairs has given in-principle approval for the establishment of a major port at Dugarajapatnam in Andhra Pradesh on PPP basis, subject to feasibility. 
• Proposals with regard to the Steel Authority of India, Indian Oil Corporation/HPCL to set up units in Andhra Pradesh are being examined as provided in the Reorganisation Act.
• With respect to Airports,
  • In Vishakhapatnam, international flights are already operating.  For further expansion, land has been identified at Bhogapuram. The State is to acquire and hand over land for development by AAI as per the standard terms for such development or develop on its own by PPP.  A techno economic feasibility report is to be undertaken by State Government.
  • For Vijayawada, MoU has been signed by AAI with Govt. of Andhra Pradesh to develop the existing terminal.  The State is to acquire 698 acres of land required for the expansion as per the standard terms.
  • For Tirupati, the new terminal was inaugurated

• The Fourteenth Finance Commission’s award came into effect from 1.4.2015.  The enhanced devolution amount due to Andhra Pradesh is being paid in entirety. This has resulted in an increase of Rs.7,787 crore in tax devolution in 2015-16 compared to 2014-15, a growth of 55%.  The revenue deficit grants for each of the years recommended by the Fourteenth Finance Commission will also be paid by the GoI to the State of Andhra Pradesh.  The same has been done for the year 2015-16 and 2016-17.
• GoI has agreed to give a special assistance measure for Government of Andhra Pradesh for five years, which would make up for the additional Central share the State might have received during these years, i.e. 2015-16 to 2019-20. This will be in the form of Central Government funding for externally aided projects the state of Andhra Pradesh signed and disbursed during these years. 

The release says that the GoI is honouring and shall honour all commitments made under the Andhra Pradesh Reorganisation Act.