Too little for two States

The Andhra Pradesh Re-organisation Act makes it mandatory for the Central government to support the successor States of Andhra Pradesh and Telangana. Besides, the then Prime Minister made some assurances on the floor of the House, which could not form part of the Act. But, it was the collective will of Parliament that passed the Act.

The measures announced by the Centre on Wednesday are grossly inadequate. They even fall short of the electoral promises the NDA has given to the people. Granting special status was the assurance. But, the just announced measures have no mention of special status. On the contrary, the Centre has been giving clear indications that the special status is almost not possible. Realising this, Andhra Pradesh Chief Minister has called for exploring alternative measures.

The section 46 (2 & 3) of the Andhra Pradesh Re-organisation Act 2014 reads as follows: 46 (2) Notwithstanding anything in sub-section (1), the 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 special development package are given to the backward areas of that State. (2) 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.

Two words are crucial here – appropriate and adequate. The Government of India has granted funds amounting to Rs 350 crore @ Rs 50 crore per district in the seven backward districts of Andhra Pradesh during 2014-15 for developmental activities. How can such a paltry allocation be “appropriate and adequate”?

Besides, an inter-ministerial joint committee is also taking stock of the situation of the Government of AP to make recommendations to bridge the likely resource gap. When the Government of AP is claiming that the budget gap will be to the tune of thousands of crores, how can a meager Rs 500 crore be justified even as ad hoc support? It is deplorable that the Centre fails to complete the exercise of taking stock even as the financial year is almost coming to close. The Centre has announced the package for AP alone, though it has to support both the states. The section 94 (2) of the act reads as follows: “ The Central Government shall support the programmes for the development of backward areas in the successor States, including expansion of physical and social infrastructure.” The section 94 (1) of the Act says: “The Central Government shall take appropriate fiscal measures, including offer of tax incentives, to the successor States, to promote industrialisation and economic growth in both the States.”

But, the measures announced by the Centre are grossly inadequate to promote industrialisation and economic growth.