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.
Reasons Why the 14th Finance Commission Removed Grants-In-Aid Benefit to States by PGurus on Scribd
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If people will only read the detailed analysis done by the author they would not jump to conclusions hastily. Mr S.Viswanathan ,in his replies of 29th March and 1st April Has well defined the subject .I suggest people to read the article thoroughly and the replies it has attracted before jumping to conclusions.
Reacting to my question as to whether the reorganized Andhra Pradesh State had made a specific quantum of funds from the centre/ Finance Commission, one reader told (“ordered”?) me to read the Andhra Pradesh Reorganization Act, 2014. That Act (Section 46) dealing with Distribution of Revenue does not mention any specific amount to be given to AP by the 14th Finance Commission. In any case, remember, Article 280 of our Constitution is the one that decides on the devolution of resources to the States --- in one form or another for one purpose or other. Instead it lists the various kinds of allocation categories to be referred to the 14th Finance Commission which was nearing the end of its term (2010-2015).
Accordingly, the NDA government got the President of India to issue an Order to the Finance Commission to the President of India to alter its existing Terms of Reference. By that Order, dated 2nd June 2014, the President ordered that “The Commission shall also take into account the resources available to the successor or reorganized States on reorganization of the State of Andhra Pradesh in accordance with the Andhra Pradesh Reorganisation Act, 2014.”
For that very purpose the Commission requested a two-month extension of its previously stipulated term; that extension was duly granted.
The Commission also had discussions with both the successor States, AP and Telangana with both, the Account Heads as well other representatives of the two States.
Annex 7.4 (Paragraphs 7.18 and 7.45) of the 14th Finance Commission carries a fairly detailed account of the detailed discussions with both the States. (http://www.thehinducentre.com//multimedia/archive/02321/14th_Finance_Commi_2321247a.pdf).
What is conspicuous about those discussions (as reported in the Commission’s Report) is that no mention at is made of Andhra Radish’s expenditure on building a new Capital city, on the Kolavaeram project etc for which Chandrababu Naidu is shouting hoarse.
It’s not surprising (or is it?) therefore that the Finance Commission’s Table 11.2 shows that, Post-Devolution, Andhra Pradesh shows surplus of Rs. 6609 crore, Rs. 4930 crore, Rs. 4439 crore, Rs. 3644 crore and Rs. 2499 crore for the years 2015-16 to 2019-20, while Telangana shows a deficit of Rs. 15003 crore, Rs. 18554 crore, Rs. 22846 crore, Rs. 28023 crore, and Rs. 34252 crore for the same corresponding years.
So where has the arithmetic, or the chemistry, or both, gone wrong? Is it with Manmohan Singh’s UPA, or Chandrababu Niaidu, or the Modi Government, or the Finance Commission headed by Dr. Y.Venugpal Reddy, the Andhra cadre I.A.S. man? Let the angry young readers of PGURUS decide. But please leave poor me out – I’m through with it all.
The link shows the expected expenditure for Andrapradesh in page 469. It is more than > 141000 crores and the revenue from the doc and GSDP all show the disparity.
These just hit my eyes with just first glance and I am nether an financial expert.
I so far thought, I could trust PGURUS, as it did the research.... This author and article broke that trust!!!!
The easiest thing the PM could have done and more so with the general election due a year from now is to grant special status to AP. As a quid pro quo Naidu would have continued to support the government and both the parties would be happy. This is what any politician would have done. If BJP did not do this in spite of the downside it must be for a valid reason and that is why i am inclined to agree with the author's logic and arguments. How may of the readers have studied the Finance Commission report which the author of the article has done?
Finally granting of special status is what the economists will call" beggar thy neighbour" measure. Who will want to set up industries in states bordering AP if AP gets various exemptions. Remember what happened when Himachal Pradesh and Uttarakhand got special status last decade and all industrialists flocked to the two states to the chagrin of other impoverished states. Then there will be clamour for jobs for locals in AP like it happened in what is now Telangana( places like Hyderabad) during separate state agitation when pressure was put on companies not to employ non- Telanganaites, particularly APites!
I thought this blog will bring unbiased information and details as it is championed by dr . Swamy and sh Iyer Ji. But it seems no different from main stream media.
I thought this blog is different from other mainstream as it is promoted by DR SWAMY and Sh. I yer Ji. But it turns out to be MODI Bhajan brundam. Super arrogant government.
All this is a load of conjecture. We can only hypothesise because no one on this blog, either the author or us readers are privy to all this details. Two things are clear - First, whatever decision was taken has not been communicated (blame squarely falls on the Central Government). In fact, it is was incumbent on them to take AP along with them on the path to the decision. Second - Chandrababu Naidu is crying hoarse only after YSR Congress created such ruckus. For God's sake, this guy was part of the NDA till about month ago. If this is how he evaluates and escalates matters, then AP had bigger problems than not being given the Special Category status.
As a follower, of Pgurus, till date, I thought all the articles written were well researched and written unbiasedly. After reading this article it either seems to me that the author has not done his research or he is completely biased.
I hope after reading this comment the team and especially the author reads the Andhra Pradesh Reorganization Act or the Telangana Act 2014 of the Indian Parliament and I hope he would view the video https://www.youtube.com/watch?v=hpgyXZqxDmQ.
Pradhan sevaak after assuming office has became Nehru....
Bhakts like this author are just washing away his sins....rather than course correcting. Now all time is up,,
sufferrers will show Nehru his place...
Will the AP sympathisers tell us just how many crores of rupees exactly should be given to AP over which period? And someone should also tell me whether as, provided in our Constitution, the new AP of Chandrababy Naidu agreed to the bifurcation? Will someone also tell me whether the "special status" to AP was included in the relevant Constitution Amendment Law of bifurcation OR was it only a promise of the then PM, Mamnmohan Singh, stating in, the Rajya Sabha, his wish that AP should be given that "special status"? By the way, alimony is given after a divorce is recorded, and cannot be given once the law on alimony is itself annulled. That alimony can come come only through a detailed polite discussion (ending in a written agreement) between the parties concerned, bearing in mind the resource
financial capabilities of the alimony giver.
The division itself is half baked because aspirations of Rayalaseema people were ignored and they are made to suffer in the so called AP. Modi did well by denying exhorbitant demands of profligate Chandra Babu who is wasting public money on foreign tours and temporary buildings. BJP shall take immediate steps to form Rayalaseema state to earn tremendous good will of Rayalaseema people.
Nation wanted a big change and we voted for that change, who we thought was well deserved...
Not to Chandrababy!
It is like politician asking - Did I ever gave an legal promisory note that I will keep up my words said during poll compaign?
Wonderful...
Please counter with facts to https://swarajyamag.com/politics/here-is-andhra-pradeshs-case-for-demanding-assistance-from-the-centre
what promises did pradhan sevak keep ? List down and give report card for Home ministry and Finance!
Half baked article. I doubt if any research is done at all to look deep into the issue.
Did people of Andhra Pradesh ask for separate state?. The current situation is a result of politics driven by both Congress and BJP to pass a bifurcation bill without doing a proper study to assess the impacts.
Any new state require huge funds to catch up with the other states. How can be a capital be built with paltry sum that are being thrown at the state ? If you can divide a state into two with little concern about the impact, what is stopping the GoI from creating a separate railway zone at Vizag? Is creating a new zone more difficult than creating a state?
If special status is not possible what stopped centre from implementing the special package which was announced in lieu ? Did this article discussed that ? FM promised that the special package and special status will differ only by name ? If so, Did this article raised on what was implemented as part of special package?
Is a financial commission report more sanscrosant than the act that is passed in the Parliament ?
Please get your facts right before laying out your foolishness for everyone to see.
The division itself is half baked because aspirations of Rayalaseema people were ignored and they are made to suffer in the so called AP. Modi did well by denying exhorbitant demands of profligate Chandra Babu who is wasting public money on foreign tours and temporary buildings. BJP shall take immediate steps to form Rayalaseema state to earn tremendous good will of Rayalaseema people.