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Home / India News / Arun Jaitley says financial aid offered to Andhra in lieu of special status

Arun Jaitley says financial aid offered to Andhra in lieu of special status

Arun Jaitley said that sentiments and agitations won’t bring funds to Andhra Pradesh. Chandrababu Naidu’s TDP in Andhra has been unhappy with the central government for not granting the state a special status.

india Updated: Mar 07, 2018 23:09 IST
Srinivasa Rao Apparasu
Srinivasa Rao Apparasu
Hindustan Times, Hyderabad
Finance Minister Arun Jaitley speaks during a press conference.
Finance Minister Arun Jaitley speaks during a press conference. (PTI)

Hours before the Telugu Desam Party (TDP) quit the NDA on Wednesday night, the Union government held out an olive branch to its disgruntled ally by offering to grant Andhra Pradesh funding equivalent to that prescribed by the special category status for a state.

The announcement by finance minister Arun Jaitley came even as the TDP vociferously insisted on special category status — as promised during the state’s bifurcation in 2014 — in Parliament.

Jaitley, in his response, said the provision of such a status is not possible because the 14th finance commission does not permit it for any state other than those in the north-east and three hilly provinces.

“Every state in India has the right to central funds in the same manner. It is not sentiment, but the constitutional award of the finance commission which decides the quantum of funds that states get,” he added.

While the finance minister admitted that Andhra Pradesh had suffered due to the bifurcation, he insisted on resolving the issue within the framework of the Centre-state relationship.

Provision of the special category status to a state entails that the Union government meet 90% of the funds required for a centrally-sponsored scheme, as opposed to the normal contribution of 60%.

Jaitley said although the Modi government had committed 90% of the funds for centrally sponsored schemes in Andhra Pradesh through other means, the Andhra government wanted funds to be routed through agri-lending bank NABARD.

He said the Centre may agree to that proposition, provided a suitable mechanism was worked out.

Provision of the special category status to Andhra Pradesh had lately become a sore point in the relationship between the BJP and the TDP, which has 16 MPs in the Lok Sabha and six in the Rajya Sabha. Andhra Pradesh goes to the polls in April-May next year, and Telugu Desam Party chief N Chandrababu Naidu is under immense internal pressure to take a call on continuing support to the NDA.

“Political issue cannot increase the quantum of money because the Centre has no free-floating funds,” Jaitley said, making light of Congress chief Rahul Gandhi’s announcement that his party would grant special status to Andhra Pradesh if voted to power.

The finance minister pointed out that while the 14th finance commission raised the share of states in taxes collected by the Centre from 32% to 42%, it clamped down on the practice of providing the special category status.

“Instead, we are compensating states that are deficit in terms of revenue because everyone will get a hike of 10% to 42%-plus for a certain period,” he said.

Jaitley also referred to a proposal made last month for a special purpose vehicle that would deal with development work in the state.

“We are awaiting a response, and I hope it is a positive one,” he said.

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