08/05/2016
Special status to Andhra Pradesh...
by Sri Raghunath Babu Yadlapati
Andhra Pradesh was divided in a half hazard manner by UPA government in the last session of the parliament just before election schedule in 2014, for political mileage in the newly formed state of Telangana.
The Telangana state was benefited with surplus income accruing from Hyderabad city, where as Andhra was deprived. UPA government has not given enough time to discuss the bill and related issues between the two states. Their underlying intention might be, that if BJP opposes the bill in rajya sabha, they would take advantage in Telangana stating that they wanted bifurcation but BJP is opposing bifurcation and also in the rest of the country.
At that stage when no other parties in Andhra thought of recouping the loss arising out of bifurcation, only Shri Venkaiah Naidu from BJP vehemently fought for the benefits of Andhra, though he is not a member of parliament from Andhra Pradesh. He could make then prime minister Man Mohan Singh to give a statement on the floor of the house that the special status will be accorded to the new state for 5 years.
Congress was committed for division of state way back in the year 2004, when they aligned with TRS for contesting the elections. They should have given a proper thought of problems arising out of division and making up the losses to Andhra Pradesh including special status, though they have got 10 years time from 2004 to 2014.
The Shri Narendra Modiji government in the first cabinet meeting on assuming the office has taken a decision to attach the seven mandals which are essential for smooth construction of polavaram project, which shows the concern of the union government towards AP. So many central institutions have been sanctioned to AP in a short span of time with relentless effort of Shri Venkaiah Naiduji. It is a record in the history of India that three central government projects were announced, the human resource development minister laid the foundation stones of the Indian Institute of Science Education and Research (IISER), Indian Institute of Technology (IIT) and Indian Institute of Information Technology (IIIT) on a single day in Tirupati (March 28th, 2015).
Though innumerable projects are being sanctioned to Andhra, the issue pertaining to special status remained focal point, which has become a tool in the hands of those who never thought of it. During the past few years, requests for special category status have been received from the State Governments of Bihar, Jharkhand, Odisha, Goa, Rajasthan, Andhra Pradesh, Chhattisgarh and Telangana.
The issue of Special Category Status came up at the time of approval of the Gadgil Formula at the meeting of the National Development Council (NDC) held in April, 1969.
The special category status is given based on the following parameters
1. Hilly and difficult terrain
2. Low population density and / or sizeable share of tribal population
3. Strategic locations along the borders with neighboring countries
4. Economic and infrastructural backwardness
5. Non-viable nature for state finances.
States under this category have a low resource base and are not in a position to mobilize resources for their developmental needs even though the per capita income of some of these states is relatively high. Moreover, a number of these states were constituted out of the former small Union Territories or districts of some other states, necessarily involving creation of overheads and administrative infrastructure that was out of proportion to their resource base.
Names of the State Special status and the Financial Year in which the status was granted are as followed
1. Assam, Jammu & Kashmir and Nagaland 1969-70
2. Himachal Pradesh 1970-71
3. Manipur, Meghalaya and Tripura 1971-72
4. Sikkim 1975-76
5. Arunachal Pradesh and Mizoram 1986-87
6. Uttarakhand 2001-02
Subsequently after 28 years special economic benefits were given like excise duty and income tax exemption in the year 1997 to North Eastern states. Jammu & Kashmir was given similar package in the year 2002. Uttarakhand & Himachal Pradesh were also given special package in 2003.
The Central government has formulated Industrial policies to special category states in the following years:
Name of the State to which the special status was granted, Initial period and Extension period
1. North Eastern States (1997-2007) - (2007-2017 )
2. Jammu & Kashmir ( 2002-2012) - ( 2012-2017 )
3. Uttarakhand & Himachal Pradesh (2003-2013) - ( 2013-2014 )
Now even though Uttarakhand & Himachal Pradesh are continuing with special status, the tax benefits come to an end in the year 2014. For the rest of the states within 2 years the economic benefits are going to expire. So, it is very clear that, the excise benefits are not automatically linked to special status and they being dispensed with.
The Government of late started discouraging excise duty and income tax benefits. Even in the case of Uttarakhand the special status was accorded after 2 years of its formation, though they fit in the eligibility norms prescribed for the status. But in the case of Andhra Pradesh it does not fit in any of the existing criteria mentioned earlier. As such there is necessity of change in the guidelines. In the meanwhile three developments took place:
1. The abolition of Planning commission, which was part of National Development Council (NDC), they Apex body which accords the Special status.
2. Also the Modiji government has increased the current share of states in the net collection of central tax revenue to 42% from the current 32% as per the recommendations of the 14th Finance Commission.
3. The proposal of GST bill from ensuing financial year also hangs the fate of excise duty benefits to certain states.
In such a scenario, the formation of new guidelines and accordance of special status is a time consuming process. The government is also taking in to consideration of Composite Development Index (CDI) proposed by Shri Raghuram Rajan in the year 2013 for future assessment of economic status of the states.
But however with a view to put the state on the fast track for development, the central government is taking all necessary steps so as to recoup the loss incurred during the The 14th Finance commission has estimated revenue deficit of Andhra Pradesh and Proposed Rs.24,000 crores support to make up the losses arising out of the deficit.
The thrust of Modi Government, Make in India is fast taking a shape and foreign countries like japan, china , USA etc.. are keen to invest in a big way in India of which, a substantial chunk will come to Andhra Pradesh in view of the locational advantage like 1000 km coast, railway line, 4 lane National highway, 4 airports and water way, besides AP was declared as 24 X 7 power state by central government.
