Jagan Mohan Reddy writes letter to Modi requesting Special Category Status

Amaravati: Requesting the Prime Minister Narendra Modi to grant Special Category Status to AP, the CM YS Jagan Mohan Reddy wrote a letter on Tuesday. In the light of the specification regarding the issue in the fifteenth Finance Commission report for the year 2020-21, he asked the centre to accord the Category Status.

On this occasion, Jagan congratulated the Central Government and the finance Minister for presenting the Union Budget for the year 2020-21. In these difficult times when the economy is sluggish and the sentiment is weak, the budget has been most reassuring and has provided necessary enthusiasm, he added.

There is however, a sense of dissatisfaction in the people of the State of Andhra Pradesh, owing to the fact that there is no specific mention in the budget regarding the steps intended to be taken by the Central Government to support the State of Andhra Pradesh.

"During several occasions in the past, I had brought to your kind attention, the widespread distress prevailing in AP. I am writing this letter to seek your guidance and support in the light of a statement contained in the report of the Fifteenth Finance Commission tabled in the Parliament at the time of presentation of the Union Budget. The bifurcation has subjected the successor State of Andhra Pradesh to immense economic hardships. Post bifurcation, the benefits of higher revenues would accrue to Telangana, depriving the successor State of Andhra Pradesh of these resources", Jagan added.

In recognition of the necessity to provide support to the State, announcements were made on the floor of the House at the time of passage of the AP Reorganization Bill, 2014, directed towards mitigating the economic hardships that the State would suffer as a consequence of the bifurcation.

"Most vital of them is the grant of Special Category Status to the Successor State of AP for a five year period. However the people of the State have been subjected to gross injustice owing to the non-grant of Special Category Status. The Central Government has put forth the argument that, in accordance with the recommendations of the fourteenth Finance Commission, Special Category Status ceased to exist", CM added.

Jagan, in his letter reiterated that, "The press release by the Ministry of Finance, Government of India on 8 September, 2016 reads as follows, The statement of the then Prime Minister, Dr. Manmohan Singh on 20.2.2014 contains six paragraphs. There are no issues with regard to five out of the six paragraphs. With regard to the first point i.e. the grant of special status, an apparent conflict has set in, between the statement and the recommendations of the Fourteenth Finance Commission which came subsequently."

The Ministry of Finance contended that, On page 17 (para 2.29 & 2.30) of the Fourteenth Finance Commission Report, the Commission stated that they had not taken into account any distinction between special and general category states in determining their norms and recommendations and therefore this has the effect of making the concept of special category status invalid. As a consequence of the Special Category Status not being accorded to the State of AP, the State has undergone immense Suffering, Putting a heavy burden on the State Government finances.

Given the fact that the Central Government has cited the contents of the Finance Commission report as reason for denial of the grant of the Special Category Status, The State Government had requested the Fifteenth Finance Commission to view the plea for grant of the status, favourably.

The Chairman and members of the Commission were most sympathetic towards the state but took the view point that it was beyond the purview of a Finance Commission to consider recommending the grant of special category status to any State.

N.K.Singh, Chairman of the Fifteenth Finance Commission, in response to a question from the media in October, 2018, stated the following, "it would be a transgression of the Presidential Notification by the Commission if it considers the issue of Special Category as it does not figure in its Terms of Reference. Philosophy of Special Category Status never emanated from any Finance commission but irom the resolution of erstwhile National Development Council The Fifteenth Finance Commission report for 2020-21 tabled in the Parliament contains the following specification.

Some States have requested the grant of special category status. This does not constitute part of the mandate of the FC-XV and remains entirely in the domain of the Union Government, which can take an appropriate decision after due consideration. Sir, in this situation where the Finance Commission has taken a very clear stand that the issue of grant of Special Category Status does not fall within the limits within which it operates, there is a very definite inconsistency between the stand taken by the Ministry of Finance and the stand taken by the Fifteenth Finance Commission".