Why AP simmers?

Andhra Pradesh feels that is has been let down. Neither the provisions of State Reorganisation Act nor the promises made therein and thereafter have been fully implemented, leaving no other option for the state but to protest. Quite surprisingly, even the Special Package offered by the Centre and accepted by the state government in lieu of Special Status is yet to be fully implemented, resulting in simmering discontent among people and polity alike.

Special Status
The re-organisation of the state was strongly opposed by the people of Seemandhra, who now constitute the residuary state of Andhra Pradesh. But, as the then UPA government took a political decision to bifurcate the state, the Special Category Status was promised to Andhra Pradesh to assuage the hurt feelings of the people of the state.

Thus, the bifurcation of the state was predicated upon the assurance by the then Prime Minister on the floor of the House and the two cannot be separated. In fact, the BJP demanded Special Status for ten years. However, the UPA government conceded this demand and agreed to grant such a status to Andhra Pradesh for a period of five years.

Despite the fact that senior BJP leaders like M Venkaiah Naidu and Jaitley were the authors of Special Status, the Narendra Modi government has refused to grant Special Status to Andhra on the pretext that the concept of Special Status ceases to exist with the new devolution formula proposed by the 14th Finance Commission.

But, an assurance by the Prime minister of India in the Parliament cannot be superseded by the recommendations of any commission. Though the Special Status is not the letter of the Act, the said assurance is part of the spirit of the act. The Section 107 of the Act clearly states that the provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law.

The Section 108 of the act further states that if any difficulty arises in giving effect to the provisions of this Act, the President may, by order, do anything not inconsistent with such provisions which appears to him to be necessary or expedient for the purpose of removing the difficulty. Thus, the President of India is legally empowered to overrule the recommendation of the 14th Finance Commission to grant special category status to Andhra Pradesh.

However, the NDA government promised Special Package in lieu of Specials Status. As per this, it was promised that the Centre would fund to the tune of 90 per cent in regard to centrally funded schemes. Thus, the additional central grant is arrived at Rs 16,447 crore.

The Centre proposed to compensate this through higher central component in Externally Aided Projects (EAPs). But, the execution of such projects would take time. Therefore, the state preferred direct fiscal transfers. As half of the 14th Finance Commission period is already over, the state government desired 50 per cent of payment. But, the Centre has hardly paid Rs 400 crore.

Revenue Deficit
The Government of India is supposed to compensate for the revenue deficit as the residuary state of Andhra Pradesh lost capital city Hyderabad to Telangana. The revenue deficit was initially estimated at Rs 16,700 crore. The amount was later revised by the Centre to Rs 7,500 crore and the central government only paid Rs 3,977 crore. While the Andhra Pradesh government claims that the revenue deficit to be paid by the Centre is Rs 12,500 crore, the Centre claims that the due in this regard is merely Rs 138 crore.

Railway Zone
The state was promised railway zone for Visakhapatnam. But, even this decision is inordinately delayed as Odisha seems to be not in favour of it as it would lose the earning centre like Visakhapatnam. The BJP, due to its political stakes in neighbouring Odisha, is dragging its feet. The argument that the Vizag railway zone will be unviable is fallacious as Vijayawada and Guntakal will be added to Vizag zone once it is separated. When Ram Vilas Paswan could ensure railway zone for Hajipur and it is viable, why can't there be Visakhapatnam railway zone?

Steel Plant
The state was also promised that a steel plant would be set up in the backward Rayalaseema district of Kadapa. The district has iron ore mines. The state government has even offered to give these mines as captive mines for the proposed steel plant on free of cost basis as the quality of the ore is low grade. This offer of the state government would make the proposed steel plant viable as raw material itself accounts for 50 per cent of cost of production. While the private steel plants of Tatas, Jindals etc., have been allotted captive mines by the Government of India, the public sector Visakhapatnam Steel Plant is denied such captive mines forcing the plant to incur losses. Inflicting further insult on the state, now the Centre is not coming forward to set up Kadapa steel plant.

Polavaram
As per the Section 90 of the AP Reorganisation Act, 2014, the Polavaram Irrigation Project is declared as a national project. Therefore, the central government is fully responsible for the execution of the project. But, due to inordinate delay in clearing the bills, the state government is incurring an interest burden of Rs 300 crore. To avoid this, the state urges the Centre to create a revolving fund, but to of no avail.

Developing Backward Areas
As per Section 46(2) of the Reorganisation Act, Central Government may, having regard to the resources available to the successor State of Andhra Pradesh, make appropriate grants and also ensure that adequate benefits and incentives in the form of a Special Development Package are given to the backward areas of that State. The Central Government shall, while considering the Special Development Package for the successor State of Andhra Pradesh, provide adequate incentives, in particular for Rayalaseema and north coastal regions of that State (Section 46(3)). The Section 94(2) of the Act further assures that the Central government shall support the programmes for the development of backward areas in the successor States, including expansion of physical and social infrastructure.

But, so far only Rs 1,050 crore were released at the rate of Rs 150 crore per district. What kind of infrastructure can be created with this meagre funding, only centre should know.

Green field Capital
The Section 94(3) of the act states that the Central government shall provide special financial support for the creation of essential facilities in the new capital of the successor State of Andhra Pradesh including Raj Bhawan, High Court, Government Secretariat, Legislative Assembly, Legislative Council, and such other essential infrastructure.

Thus, the Reorganisation Act mandates the Centre to fund the construction of a green field capital at Amravati for the state of Andhra Pradesh as the existing capital of Hyderabad became the capital of Telangana. However, no specific resources were mentioned in the act.

Taking advantage of this, the NDA government has granted only Rs 1,500 crore so far. The fact that the underground drainage works taken up in Vijayawada and Guntur were also included in this head on the pretext that these two cities also fall in the capital region has further infuriated the state.

What about Port?
The Centre has to set up Dugarajapatnam Port in the Nellore district of Andhra Pradesh. But, the construction encountered certain objections as sensitive ecosystem of Pulicat Lake and the satellite launching station ISRO of Sriharikota are very near to Dugarajapatnam. But, the Centre neither addresses these hurdles nor proposes an alternative place.

Petro Project
Andhra Pradesh should also get a petroleum refinery and cracking unit as per the bifurcation package. But, the HPCL-GAIL consortium is reportedly seeking a viability gap funding of Rs 1,200 crore per year for a period of 15 years from the state government. The state feels this is unfair as it is the assurance of state bifurcation and any such viability gap funding should come from the Centre itself.

Tardy Progress
To implement the State Reorganisation Act, the Centre has already set up several educational institutions in the state. But, the flow of funds is tardy and these institutions are yet to take off in any significant manner.