The NDA government had promised the “Special Status” category to Andhra Pradesh but that was before 14th Finance Commission came into effect.
The truth about the denial of the “Special Status Category” to Andhra Pradesh is, as they say, in the fine print. But in our loud and lunatic democracy, who is willing to read it, respect it and then decent enough to and project it to the public without a spin or a tweak?
That is precisely why Chandrababu Naidu has gone almost nuts to demand that Special Status, even if it means making sacrificial goats of his two Union Ministers, disrupting Parliament day after day, and leaving the country in a state of uncertainty and anarchic in effect.
The ruling NDA too has played its part in this scene. Almost totally unaware of the importance of honest communications, Arun Jaitley, the Finance Minister, and all else downwards has kept mum, only saying that it is the14th Finance Commission that removed the Special Status designation to the States. Their stage is when they can communicate only digitally, in 14 digits if you will.
Jammu & Kashmir was the first state to get Special Category Status, 10 other states were added over the years.
The TV media is no different. They will revel in creating shouting debates between six or seven (even ten for that matter) participants, fighting for their TRPs for 24 hours a day but ignore the fine print. And the social media activists will go berserk on their computers, posting all kinds of defamatory allegations, concerned only about their own “special status” rather than uncover the facts —- that is so much more troublesome than typing out their 140 characters into 140 Tweets.
In the process, words have flown, good versus bad, truth be blown away. Arun Jaitley points to the 14th Finance Commission and the Congress intellectual, Jairam Ramesh says Jaitley is lying.
The nation, meanwhile, is weeping, in shame as to where our democracy has led us into.
That is one truth.
And the other one lies in the Report of the 14th Finance Commission.
Even knowing that that truth will not make an iota of difference to how our shameless detractors of a decent democracy, here below are excerpts of is what that Commission said about the “Special Status” issue among its 497n-page Report which, one must happily acknowledge, is what good economic-cum-financial experts have set out before the nation.
But before those excerpts, let it be known what “Special Status” to a State has meant in India for long since the phrase was coined by the National Development Council (a body of the erstwhile Planning Commission) on various parameters such as
1.Hilly and difficult terrain. 2. Low population density
3. Low resource base. 4. Strategic location along the borders of the country. 5. Economic and infrastructure backwardness. 6. Non-viable nature of the state’s finances.7. A sizable share of tribal population
Jammu & Kashmir was the first state to get Special Category Status, and another 10 states were added over the years, with Uttarakhand being the last in 2018.
“Our objective has been to fill the resource gaps of each State to the extent possible through tax devolution.”
Why this craze for “Special Category Status” among our Federation structure? Because of the following benefits showered on them:
(a)Preferential treatment in getting central funds assistance
(b) Concession on excise duty to attract industries to the state
(c) A significant 30 percent of the Center’s gross is estimated that goes to the special category states
(d)· These states can avail the benefit of debt swapping and debt relief schemes
(e) In the case of centrally sponsored schemes and external aid, special category states get it in the ratio of 90 percent grants and 10 percent loans, while other states get 30 percent of their funds as grants.
(f) Tax breaks to attract investment
Now go the excerpts from the 14th Finance Commission report.
“We did not make a distinction between special and general category states in determining our norms and recommendations. Our endeavor has been to take a comprehensive view of these commonalities and special characteristics of individual States while making our assessment and recommendations. In this regard, we have observed that the North-eastern and hill States have several unique features that have a bearing on their fiscal resources and expenditure needs, such as low level of economic activity, remoteness, and international borders. Our objective has been to fill the resource gaps of each State to the extent possible through tax devolution. However, we have provided post-devolution revenue deficit grants for States where devolution alone could not cover the assessed gap.” (Section 2.29, Page 30)
Intellectuals like Jairam Ramesh will understand that truth, only if the will and the vision to see that truth are there.
“Prompted by the distinguishing features of our ToR (Terms of Reference) and an assessment of the evolving environment, we have made some changes in the approach and methodology wherever necessary… We have not categorized States for the purpose of devolution. We have minimized the use of conditionalities and incentives. We have also increased untied transfers. This reflects our trust in all tiers of governments.”(Section 2.42, Page 33).
“Only the North-eastern States, as well as the hill states of Himachal Pradesh, Jammu and Kashmir and Uttarakhand continue to receive a substantial portion of Plan grants by way of normal assistance for State Plans.” (Section 5.6, Page 63)
iv) Grants-in-aid for state-specific projects or schemes will not be considered, as these are best identified, prioritised and financed by the respective States. (Section 11.33, Page 160)
Detailed reasons for withdrawing this Grants-in-aid support are attached separately to this article.
The truth of why Andhra Pradesh has not been granted the “Special Status” has been laid on the table here. Intellectuals like Jairam Ramesh will understand that truth, only if the will and the vision to see that truth are there.
Yes, the NDA government had indeed promised the “Special Status” category to Andhra Pradesh when it came into power after May 2014, soon after the old Andhra had been bifurcated. But that was before 14th Finance Commission came into effect. The latter simply compelled a change in the rules of engagement. Considering that it radically altered the country’s financial devolution structure with a well-reasoned economic logic, its relevant recommendation could not be refused. But NDA has repeatedly promised to provide the needed funds to Andhra. And done so.
Today, considering that Rs.4,000 crore has been granted to Andhra to bridge its revenue deficit (as stipulated by the 14th Finance Commission) and only Rs.138 crore was left to be paid, even hugely egoistic Chandrababu Naidu – and his sycophants — should understand the truth.
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