Will give monetary equivalent of special status to AP: Jaitley

Amid an ongoing debate over according 'special status' to Andhra Pradesh, Finance Minister Arun Jaitley on Wednesday said the Centre is committed to offering the monetary equivalent of this status to the state, which will be presented as a 'special package.'

"The Centre stands committed to satisfy every condition. Only variation is that after the 14th Finance Commission report, instead of formally calling it a Special Category state, we are calling it a special package, which gives the same monetary benefits that a special category state gives you," Jaitley told reporters here.

However, Jaitley ruled out the possibility of political turmoil in the state resulting in an increase in the quantum of funds to be given.

 

"Sentiment does not decide the quantum of funds. The Centre has repeatedly said that we are ready to give funds. Every state in India has a right to claim central funds in the same manner. I have been sympathetic to AP because I know it suffered due to bifurcation. However, political issues cannot increase the quantum of money, as the Centre does not have free floating funds," he said.

Highlighting the implications of the special status category, Jaitley clarified that instead of the conventional 60-40 contribution from the central and state governments towards central schemes; such states get a 30 percent advantage, as the ratio for this case is 90-10, with the larger proportion coming from the government.

"The special status was granted to the North East and the three hill states as they lacked adequate funds. However, after the 14th Finance Commission report, the status was done away with, but the 90-10 provision remained. The Centre had decided that when AP's bifurcation took place, the monetary benefit should be given to them as they suffered greatly," said Jaitley.

Clarifying the provision of tax and revenue deficit, Jaitley stated that tax concessions were already given in the first two years, along with provision for revenue deficit as per the Finance Commission.

Reiterating the Centre's commitment to aiding the state, Jaitley said Andhra Pradesh must decide what manner funds need to be given in.

"In 2016, we had proposed that external agencies such as the World Bank, and Asian Development Bank (ADB) could fund projects in AP, and the money for the same could be paid in 90-10 proportion by the Centre and state government. However, AP asked for money from the National Bank for Agriculture and Rural Development (NABARD). To this, we had proposed that a special purpose vehicle in terms of a corporation be set up, where NABARD could deposit money and we would repay funds in the same proportion, so that fiscal deficit of the Centre and state remained unaffected. We are still awaiting a response for this," he added.

Jaitley further stated that a policy needs to be undertaken by the Centre, keeping in mind the unity of the states.

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"For us, as a government, it is necessary to look at the country as a whole. We cannot undertake any policy that can cause any form of dispute between the states, particularly between those that earn less than AP," he said.

On a related note, The Bharatiya Janata Party (BJP) and its Andhra ally Telugu Desam Party (TDP) have been sharing a sour relationship following the announcement of the Union Budget 2018-19 after the latter alleged that the Centre had not allotted 'enough fund' to the state in the budget.