Special Status to Andhra Pradesh



Special Category Status is anarrangement suggested by the Fifth Finance Commission in 1969 to make the Central Government assist the development of backward states of India. An agenda was proposed by the commision for allotting a part of Central government funds to the State governments of the backward states.

There are several benefits of Special Category Status. The states have to pay only a negligible part of excise and customs duties, income tax and corporate tax. Since the industries are almost tax free, more industries and multi-national companies would show a keen interest to come to those states due to which employment opportunity increases significantly. 30% of planned expenditure is shared between Special Category States. There are two types of expenditures Planned expenditure which is nothing but the Central Budget which the Governent puts forth and the Unplanned expenditure which is the expenditure which arises suddenly such as the money spent for epidemic reliefs, sudden war etc. The Normal Central Assistance Policy is crooked in favour of the Special Category States and hence these states get more funds in terms of the NCA.

The point to be highlighted here is that these states receive the funds not as loans but as grants by Central Government. An additional amount is also given to those states for economic development as Special Central Assistance. The Centre bears 90% of the State expenditure and the rest 10% is given as loan to the state. So, the Special Category States only needs to bear 10% of their expenditure. Unspent money gets carried forward in case of normal states, the unspent money lapses but the Special Category States are entitled to use it in the coming years as well.


Parameters for giving Special Status

According to the National Development Council, the states with the following features are entitled to have special status:

1) Parameters judged by the Ministry of Commerce and Industry are: Geographical isolation, Inaccessible terrain, Poor resource base, Remoteness to larger market, Poor infrastructure.

2) Parameters judged by the Planning Commission are:  Hilly and difficult terrain, Low population density, Strategic location along borders with neighbouring countries, Economic and infrastructural backwardness, Non-viable nature of state finance.


Relevance of this status to Andhra Pradesh.

Andhra Pradesh does not satisfy majority of the parameters for special status but there is a strong reason why the people of Andhra Pradesh are demanding the special status and they also really deserve it.

Andhra Pradesh has always been a victim of cheap politics played by the Congress party which was in rule before 2014 at both the State and the Centre, Congress party wanted to divide the state and was fully aware of the fact that it cannot come into power in SeemAndhra if it does So, with an aim to come to power in Telangana, it has followed an extremely impartial division and passed the division bill without much discussion in the Lok Sabha.

Andhra Pradesh lost its capital Hyderabad to Telangana. Hyderabad is one of the fast-developing cities in India and has an annual GDP greater than that of Chennai.

Before the separationHyderabad was alone generating crores as revenue. Although it was decided that Hyderabad would be the mutual capital for 10 years, everyone knew it would amount to nothing as the Telangana government would start taking complete hold of the capital once the state divides. So, Andhra Pradesh was left with no capital, lack of source of income and also a huge amount of debts.

So, the then Prime Minister promised Seemandhra in front the Lok Sabha that Andhra Pradesh would be given a Special Status for 5 years in order to recuperate from the huge economic loss and to build their capital. The Union Parliamentary Affairs Minister M. Venkiah Naidu was then in the opposition. He demanded the status to be prolonged to 10 years and said that it would be done by BJP once they come into power.

This was also an integral part of the election manifesto of BJP during their election campaign in Andhra Pradesh but the bill that eventually turned into law assured central assistance to develop a new capital for Andhra Pradesh a separate High Court, ports and other infrastructure and Centre would sponsor the Polavaram Irrigation Project but did not have any mention on Special Status. Telugu Desam Party which is allied with the BJP during the General Elections came into power in Andhra Pradesh and the people of Andhra Pradesh were in hope that they would be given special status but the Central Government has turned deaf year after coming to power.

There were small movements started right after the elections demanding Special Status. With immediate effect the opposition parties in the state called for Bandhs to gather the media attention.

Even the BJP got down a step and offered a Special Package which includes plenty of economic help to the State but the people of Andhra Pradesh are not at all satisfied with it and are continuing their demand for Special Status.

According to a former Supreme Court Judge, anything which is promised by the leader of the House at the time of passing the bill and recognized by the House is equivalent to it being written in the bill. So, the people of Andhra are enduring their fight for their right promised by the Lok Sabha and only time would decide the final outcome.

By: Swati Rai