With the birth of India’s 29th state, Telangana, at midnight on Sunday; the request to give special status to residual Andhra Pradesh allowing tax exemptions and more Central funds, has gained momentum.
Congress president, Sonia Gandhi asked Prime Minister Narendra Modi to fulfil the UPA government’s promise of granting them special status. But the Planning Commission ruled that the status can be granted only by the National Development Council (NDC) — a body headed by the PM, with all chief ministers and union ministers as members.
Gandhi wrote to Modi on Monday promising full cooperation to the NDA government in implementing the commitments to residual Andhra Pradesh made in the Andhra Pradesh Reorganisation Act, 2014.
“The groundwork for most commitments, like area of water resources, grant of special category status and facilitating the Polavaram project, had already been laid by the erstwhile UPA government,” she said, adding, “I do hope that your administration will build on what we had accomplished and take them forward.”
She has also attached a note giving details of the commitments made by then Prime Minister Manmohan Singh and then home minister Sushil Kumar Shinde on the floor of the Rajya Sabha.
Meanwhile, Telugu Desam Party (TDP) head and chief minister designate of residual Andhra Pradesh Chandrababu Naidu had met PM Modi last week and demanded granting of special category status to the new state.
“Residual Andhra Pradesh should be given industrial incentives like what was offered in Uttrakhand and Himachal Pradesh,” said Naidu after his meeting with the PM.
It would not be easy for the Modi government to grant the status as newly carved Andhra Pradesh does not fulfil the criteria. Only states having hilly terrain, low population density or high tribal population, strategic location along borders and non-viable nature of state finances have been granted the status in the past.
Special category status started in 1969 on the recommendation of the fifth Finance Commission. A special category state gets 90 percent grant as compared to 30% for others and also exempted from Central taxes as incentive for industrialisation.
“Only the NDC can change the criteria and there is no proposal to call an NDC meeting in near future,” a senior government official said.
It was also a reason for the NDA government to not mention special category status for residual AP in the Re-organisation Ordinance passed at the first cabinet meeting of the Modi government.