The erstwhile state of Andhra Pradesh used to share the third place with West Bengal, in terms of number of MPs per state in the Lok Sabha. However, when compared to the extent of influence in National media or in actual representation in the Central cabinet, it had always lagged behind. Even during the times of UPA-1 and 2, it had seldom been assigned any of the important ministries. Yet, none of the local politicians from AP ever quibbled with the Centre.
However, things are bound to change in the next few months courtesy two mistakes. Both these arise from the uncertainty created by UPA-2 during the bifurcation of the state.
Hyderabad is to AP what Mumbai is to Maharashtra or Delhi is to India. The city has high income levels, higher exposure to the world, but, what matters most is that it has the highest concentration of industries in the state. So much that out of the total revenues of the united state, nearly half comes out of the Hyderabad district alone. The revenue surplus of Telangana (including Hyderabad) calculates to around Rs. 4000 crore, while the revenue deficit of the remaining AP stood at a staggering Rs. 7000 crore.
This fiscal imbalance was never understood properly by the representatives in Delhi and so, they initially thought they could win over the people of AP by bridging this gap with funds in the form of grants or loans. This did not appease the masses of AP as they understood that they couldn’t survive on the basis of funds. If there are no industries in the state, where would the jobs come from? Sadly, the UPA government lacked this basic understanding until the day the bill came up in Parliament.
After “consultations” with the opposition and under pressure from his own party men, the then Prime Minister Manmohan Singh, on the floor of the House gave the following assurances:
1. To help aid the state’s finances, Special Category Status will be extended to the successor state of AP
2. Tax incentives would be provided to promote industrialization and boost economic growth
3. Special development package for the backward regions of the successor state of AP, and so on.
Of all these assurances, the most contentious ones were those of the issue of special category and tax incentives. However, none of these assurances have been incorporated in the AP Reorganization Act.
The “Report of the working group on state’s financial resources for the 12th five year plan2” by the Planning Commission, gives an idea of the basic difference between an ordinary and a special category state.
“For the general category states, assistance was 30 percent grant and 70 percent loan. For the special category states, 90 percent of assistance was given as grant and 10 percent as loan.”
A special category status is generally given to a state which satisfies certain criteria like having a hilly terrain, strategic location, etc. It also contains a provision of providing the status if the state’s finances are of non-viable nature. The successor state of AP, though of poor financial situation, does not come under any of these criteria. That is the reason why arguments for special category for Odisha or Bihar were struck down.
Also, in its summary the report says, “the special category states had been given unduly high shares and this has had high opportunity cost while it has also resulted in considerable debt for special category states even while their economies had made little progress.” So, it had been established that grants are not the only means of achieving economic growth.
However, the case of AP is different from the rest. For instance, when it was bifurcated, it was left with neither a capital nor any major industry. So, grants and loans from the Centre to raise infrastructure and building a capital would certainly help recover the lost sheen and start something from the scratch. The second major issue is the proposed tax benefits to industries which set up their units in AP. This has so far been a nonstarter.
In the General elections of 2014, the people of AP voted for the BJP-TDP coalition and taught the UPA a lesson. The ruling Congress party had not won a single MLA seat in the state. 13 months later, the situation has changed. The people of AP are frustrated with the sluggish pace of the Centre in implementing the promises it made during the election. Rallies are being held in several parts and strikes are organized to force the elected representatives to understand that they are not impressed with them. The argument that Planning Commission had been rechristened and so, the entire issue had to be studied in a different perspective does not seem to hold much merit.
Meanwhile it is ironic to note that the Congress party is starting to blame the Government for not implementing what they had promised a year ago. This is in line with the Congress stand vis-a-vis OROP, a demand which they themselves sat on for decades, and are now trying to blame BJP for. Had they incorporated the assurances made to Andhra Pradesh, into the bill in the first place, there would not have been a problem at all. Their logic appears simple – Make a mistake and blame others for not cleaning it up.
At the end of the day, it is for the NDA government to decide whether it wants to follow the steps of its predecessor or remain loyal to its citizens. If it continues to drag this issue till the next election, people might not have the patience to wait till then. Already, dissatisfied students and disillusioned youth are starting to look at other options. Their last hope is that the Prime Minister, who is supposed to arrive in AP for the inauguration of the work for building capital on October 22, would bring good news with him. Will they get their rightful share?
written by Naga Sai Viswanath B
Engineer, and a Civil Services Aspirant