NITI Aayog preparing over 1-lakh cr package

​New Delhi: The Centre is evolving a counter strategy to take on the Opposition in AP on the issue of implementation of the provisions of the AP Reorganisation Act 2014, and on the assurances made on the floor of the House, including that of the Special Category Status "through a substantial financial package".

The size of the package would be sufficient to silence the critics, it is being said. Going by the sources, the package could be between Rs 1.25 lakh crore to Rs 1.5 lakh crore - subject to the approval of the PMO.

The Centre has directed the NITI Aayog to knit the plan at the earliest and would like to announce the same soon. The Centre understands the political compulsions of the TDP and is in no mood to concede any ground to the Opposition in this regard.

This being the only State in the South, where it is sharing power and also in the process of strengthening its base, the BJP is serious about retaining its toe hold here, it is said.

The NITI Aayog officials, who have been asked by the Centre to "arrive at the figures of a reasonable package", are revisiting the provisions of the Reorganisation Act as well the assurances given to AP during bifurcation to estimate what it would all mean financially, it is learnt.

However, a major share of the package would be devoted to the improvement of the road connectivity under various programmes, it is indicated. Urban development schemes and infrastructure projects and airports would be in the next level.

The revenue deficit grant and backward region developmental grants are also to be taken care of.
The package, essentially, will take all this into account and also the demands of the State in arriving at the "reasonable figure", it is said.

It may be recalled that a comprehensive proposal for an amount of Rs 24,350 crore has already been generated by the AP Government.

Chief Minister N Chandrababu Naidu has written to the NITI Aayog in May 2015 and later on January 6, 2016 listing out the requirements of the primary sector, infrastructure, social infrastructure and skill and employment sectors.

As for the Special Category Status, how will the Centre try to appease the sentiment part, is not yet known. Perhaps, it would prefer "an honest way out" by admitting that one should forget the Status and be realistic, it is said.

The special status is no more relevant after the advent of the NITI Aayog and the 14th Finance Commission. Initially there were only three states in the special category but gradually the number became 11. To understand the concept of this status, first we need to understand the framework which governs the transfer of funds from the Centre to states.

Earlier, there were two types of transfer- statutory and discretionary. Statutory transfers/ grants were decided on the basis of FC – Article 280, while discretionary grants were decided on the basis of recommendation of the Planning Commission.

Grants like Normal Central Assistance, Additional Central Assistance, Special Central Assistance etc used to come under discretionary grants decided by PC and in these grants SC used to play an important role.

Special category states were given priority not only in allocation but allocations to them were mostly in form of grants while for non-SCS it was mostly loans.

Plus, ration was 90:10. But, now with the end of PC, these CAs are also no more relevant. And hence there is no point of special status, the sources pointed out.

The Centre will be hard put to explain these technicalities to the people of AP. But for now it could be, as the sources say, Rs 1.25 lakh crore, Rs 1.5 lakh crore or even more, say up to Rs 2 lakh crore.