Arun Jaitley says govt can’t grant special status to Andhra, will give financial aid
Union finance minister Arun Jaitley on Wednesday ruled out granting special category status to Andhra Pradesh because the concept of special category status exists no more following the recommendation of the 14th finance commission.
Amid speculation that the Telugu Desam Party (TDP) could exit the BJP-led National Democratic Alliance (NDA) over Andhra Pradesh not being given central funding under ‘special status’, Jaitley sought to pacify the TDP saying the government is committed to giving Andhra Pradesh financial assistance equivalent to a special category state.
At a press conference in New Delhi, Jaitley conceded that before the 2014 elections the BJP had promised to give the status to AP for a period of 10 years.
However, the concept of special category status ceased to exist following the recommendation of the 14th finance commission, which is a statutory body. That is why, we have decided to grant a special financial package to Andhra Pradesh, keeping in view the loss of revenue it was facing on account of bifurcation,” he said.
He reiterated that the special package would extend all the benefits to the state, which it would have got through the special category status.
“It is a simple formula. For the centrally sponsored schemes, the special category states would get 90 per cent in the form of grants, as against 60 per cent for non-special category states. The difference is only 30 per cent and we have agreed to reimburse this additional 30 per cent grants to AP and we stand by it,” he said.
With regard to revenue deficit, he said the dispute was only with regard to the reimbursement for the first 10 months period of 2014-15 (the year of bifurcation), while for all the subsequent years, the revenue deficit amount was being paid as per the 14th finance commission report.
The maximum amount that could be given for the pending period of 2014-15 is Rs 1600 crore, which we are ready to pay,” he said.
On the assistance for externally aided projects, Jaitley said as per the special financial package, it was decided that the Centre would bear 90 per cent of the loan component. “But the state said it would take a long time to get the loans from external agencies; and so, it wanted the loan amount to be routed through Nabard. But if it is done, it would result in additional fiscal deficit and reduce the borrowing limit of the state. So, we suggested that the state can float a special purpose vehicle to raise loans from Nabard, so that the Centre can bear the 90 per cent of the loan. It is for the state to decide,” he said.
He also said the GST refund being given to eight north-east states and three Himalayan states cannot be given to Andhra Pradesh, as there were several other states more backward than AP and they would all make the same demand. “We need funds for the country’s security also. How can we adjust funds?” he said.
Jaitely said the Centre would not succumb to any kind of pressure tactics. “Sentiments and agitations cannot change the rules and regulations of the devolution of funds and there would be no additional funds just because of agitations,” he said.
Jaitley’s remarks drew a sharp comment from the TDP with Andhra Pradesh agriculture minister S Chandramohan Reddy describing them as disappointing.
“The Centre has shown least concern towards Andhra Pradesh. It has hurt the sentiments of the people,” he said in Delhi.
Arun Jaitley says govt can’t grant special status to Andhra, will give financial aid | india news | Hindustan Times
