The NDA government on Wednesday announced a special financial package for the development of Andhra Pradesh in lieu of the special category status promised by the previous UPA government at the time of bifurcation of combined AP in June 2014.
The quantum of the financial package would be announced on Thursday.
Despite the pressure mounted by chief minister N Chandrababu Naidu, the Centre has ruled out granting special category status to AP on the ground that the statute does not permit the same as per the recommendations of the 14th finance commission.
The financial package was finalised after a series of discussions between finance minister Arun Jaitely with his Cabinet colleagues M Venkaiah Naidu and YS Chowdary all through the day, besides telephonic talks with the chief minister in Vijayawada. After taking approval from Prime Minister Narendra Modi, Jaitely made a formal announcement at around 11 pm late in the evening.
The finance minister said the Centre would abide by the decision to implement all the assurances given in the AP Reorganisation Act in letter and spirit.
“Because of the constraints as per the 14th Finance Commission report, we might not be in a position to grant special category status to AP. However, we have decided to implement Special Assistance Measure, in such a way that it largely compensates the losses caused to the state for being denied the special category status. In fact, the benefits of this special package will be much more than what the state would have got had it been granted special category status,” Jaitely told media, adding that the details of the package would be posted on the website of finance ministry on Thursday.
As the part of the special package, the Centre would bear the entire expenditure of the Externally Aided Projects, which would have been the case had the state been given the special category status. “All the benefits the state would have got through special category status would be extended in the form of Central assistance. In a way, the assurance given by former Prime Minister Manmohan Singh in the name of special category status for five years would be honoured in its true spirit,” Jaitely said.
The finance minister announced that Polavaram major irrigation project on Godavari river had been declared as a national project and the entire expenditure with effect from April 1, 2014, would be borne by the Centre.
Andhra Pradesh, which financially suffered because of creation of separate state of Telengana in June 2014, will get also tax concessions, a special assistance and a railway zone, reports PTI.
(With inputs from PTI)