AP CM YS Jagan Speech at Southern Zonal Council Meet Tirupati

Andhra Pradesh Chief Minister YS Jagan Mohan Reddy in his inaugural address to the 29th southern zonal council meeting held in Tirupati, stressed on various points.

Following are the excerpts of the Chief Minister's speech:

I reiterate that for the Country’s overall development, the robustness of the Centre-State and Inter-State relations is of paramount importance. I therefore emphasize the need to work towards a mechanism that ensures amicable and time bound settlement of issues that exist between the parties.

Post bifurcation of the erstwhile State of Andhra Pradesh in 2014, the newly formed State of Telangana and the Successor State of Andhra Pradesh have several bifurcation related issues that are yet to be resolved. The long pendency of these issues would not only force the States to endure a huge economic loss but would also have the potential to strain the relationship between the States. It is imperative that a suitable solution emerges and the issues are addressed at the earliest. I seek to draw the attention of this august body to some of the matters requiring urgent intervention.
Sir, the bifurcation of the erstwhile State of Andhra Pradesh has caused immense hardship to the Successor State of Andhra Pradesh. The disastrous consequences of the bifurcation are evident from the fact that during 2015-16, the first full financial year after the State bifurcation, the percapita State’s own revenues of Telangana were Rs. 15,454 as against a corresponding figure of Rs. 8,979 for Andhra Pradesh. This figure singlehandedly conveys the distress of Andhra Pradesh. In recognition of the necessity to provide support to the State of Andhra Pradesh, commitments were made on the floor of the house at the time of passing the AP Reorganization Bill, 2014. Further, important measures were contemplated under the Act to assist the successor State in strengthening its economy and State Finances. Had all the assurances and contemplated measures been implemented, the difficulties faced by the successor State would have been alleviated to some extent. However, such is not the case. Even after seven years of bifurcation, the majority of the commitments remain unfulfilled and Andhra Pradesh continues to face immense economic hardships and deprivation. I take this opportunity to draw the attention of this august body to some critical issues faced by the State of Andhra Pradesh.

A key commitment made to the State of Andhra Pradesh is the execution of the Polavaram multipurpose irrigation project. The Andhra Pradesh Reorganization Act, 2014 declared the Polavaram project as a national project with the Central Government being made responsible for the execution of the project. Owing to the delays in the project execution and significantly higher compensation for land acquisition, Rehabilitation and Resettlement in the light of the applicability of the provisions of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, there has been a significant cost overrun on this account. Various Central committees such as Technical Advisory Committee and Revised Cost Committee have accorded approvals for the enhanced project cost. What remained a cause of concern for the people of the State is the stand taken by the Central Government in limiting their responsibility to the extent of the project expenditure at the 2013-14 price level indicating that the State should mobilize the remaining funds from its own sources. This is nothing but a direct violation of the commitment made to the State. Further, the Central Government also seems to be absolving itself of the responsibility for the project execution to the extent of the drinking water component, despite the fact that the drinking water component is usually clubbed with the irrigation component in any National Project. These unfortunate occurrences have the potential to jeopardize the future of a project that is regarded as the lifeline of the State, and a long-cherished dream of the people of Andhra Pradesh. Hence it is requested that full funding be provided and the completion of the project by the Government of India be ensured in line with the letter and spirit of the provisions of the Andhra Pradesh Reorganization Act, 2014.

Sir, another commitment made on the occasion of State bifurcation was in the background of the fact that the first financial year after State bifurcation would have still been within the period to which the Thirteenth Finance Commission recommendations apply. The then Hon’ble Prime Minister has made an assurance on the floor of the Rajya Sabha on 20-02-2014 that the resource gap in the successor State of Andhra Pradesh occurring during the period between the appointed date and the date of acceptance of the 14th Finance Commission recommendations by the Government of India has to be compensated through the regular Union Budget for the financial year 2014-15. Resource gap is not a word defined anywhere, however, given the reference to the Finance Commission, which estimates the quantum of revenue deficit, it is amply clear that resource gap is nothing but revenue deficit. As per the accounts for the Financial year 2014-15, audited by the CAG, the revenue deficit for the period from 2 June 2014 to 31 March 2015 was Rs. 16,078.76 Cr. In addition to this, there are other financial obligations pertaining to that period that have not been discharged due to paucity of funds, which has to rightfully be regarded as part of the resource gap for that financial year. Thus, the total resource gap for that year is Rs. 22,948.76 crores. However, the Central Government has subsequently introduced a new concept of “Standardized Expenditure” and conveyed that their liability to compensate the State is only to the tune of Rs. 4,117.89 crores. Sir the commitment to compensate the State has been made bearing in the mind the deficiency remaining unaddressed. By minimizing the quantum so substantially, I submit that the objective with which the commitment was made is defeated. Therefore, we seek your kind intervention in revisiting this topic to find a suitable solution at the earliest. 

Sir, another issue emanating from the State bifurcation is the settlement of the power dues between the two States. I wish to draw the attention of this august gathering to the fact that an amount of Rs. 6,112Cr is receivable by Andhra Pradesh Power Generation Corporation Limited from the Telangana distribution utilities. This amount pertains to power supplied by APGENCO to Telangana DISCOMs from the date of State bifurcation to 10th June, 2017. The Telangana DISCOMs have recognized the amount as payable but are yet to make the actual payment. It is necessary to mention in this regard that, immediately after bifurcation, APGENCO has expressed its inability to supply power to Telangana.  Despite the objection by Andhra Pradesh Government, Ministry of Power, Government of India had suo-moto scheduled and compelled APGENCO to supply power.Rs. 6,112 crores are the balance amount that has to be paid for the power supplied. Govt. of Telangana has now taken a stand that this balance payment will be made along with adjustment for the Electricity Utilities Demerger plan.  I submit that after initially making part payment for 3 years, now conveying a new stand to adjust with the implementation of demerger plan of power companies is not appropriate.APGENCO is financially stressed and is struggling to meet its debt servicing requirement and operational costs. Given the fact that this supply of power took place owing to the stand taken by the Central Government, I request the Central Government’s intervention at this juncture to take the necessary steps for the resolution of the problem. 

Apart from the above, there are several State bifurcation related assurances that are yet to be fulfilled. In fact, it would not be out of place to mention that the State bifurcation was made conditional on the commitment to accord the Special Category Status. However, despite the passage of several years, that key commitment is yet to be honoured. Other assurances such as completion of 8 infrastructure projects, the full-fledged establishment of 11 institutions of national importance under Schedule XIII of the Act by 2024, sanction of special development package for backward districts on the lines of Bundelkhand special package have not been fulfilled at all or were only fulfilled to a very minimal extent. Further, legal division of assets approximately valued at Rs.1,42,601 Cr. belonging to institutions listed under Schedules IX and X and of institutions not mentioned in the Act, has not happened so far hampering their functioning and resulting in adverse impact for the State. The Central Government’s kind and urgent intervention with respect to these matters is crucial to safeguard the interests of the State of Andhra Pradesh. 

Sir, apart from the issues resulting from State bifurcation, I wish to draw the attention of this august body to other inter-State and Centre-State issues that the State is currently facing. Regarding Telugu Ganga Project as per Interstate Agreements1976, 1977 & 1983 the States of Maharashtra, Karnataka, and erstwhile Andhra Pradesh agreed to spare 5TMC each from their respective allocations in Krishna river basin for drinking water supply to Chennai city. Although there is a lack of cooperation from other States, the State of Andhra Pradesh has been supplying water at the Tamil Nadu border as and when requested by Tamil Nadu Government to meet the drinking water needs of Chennai city. Of the compensation required to be paid for infrastructure and cost associated with operation and maintenance, an amount of Rs. 338.48 crores have been pending for the past 10 years. In this regard, I request that suitable steps be taken to settle this amount at the earliest. 

Sir, I take this opportunity to draw the attention of this body to a recent development that has the potential to cripple the financial position of the State of Andhra Pradesh. For the financial year 2021-22, the NBC (net borrowing ceiling) was originally fixed at Rs. 42,472 crores as per the FRBM norms fixed by the Central Government and applicable to every State. The Department of Expenditure, Ministry of Finance, Government of India has subsequently informed that an amount of Rs. 17,923.24 crores had to be adjusted against the Net Borrowing Ceiling fixed for this year on account of the so called overborrowing of the State during earlier years of the previous Government in the State. Despite the persuasion by the State Government that the reduction of limit would be extremely harsh on the State for no fault of ours, the Ministry of Finance did not accede to the request of the State Government and has spread the deduction over a three-year period.  With respect to the financial year 2016-17, the final audited accounts were also placed before the State legislature and made available to the public on 6th April 2018 itself. This raises a very pertinent and serious question. Had it been a violation that was indeed committed, the Ministry of Finance, Government of India should have taken cognizance of this so called overborrowing then itself and accordingly adjusted the permitted borrowing limit for the year 2018-19 itself. Further, the so called over-drawal was only borrowing and not a grant. The borrowing is also being serviced with utmost sincerity and without any default. I humbly submit that this unprecedented move of reducing the borrowing limit to accommodate for the so called overborrowing pertaining to a 5-year period of the previous Government, particularly during these extraordinary times of pain and suffering caused by the outbreak of the pandemic, would debilitate the fiscal health of the State. I seek the urgent intervention of the Hon’ble Chairman in this matter.

Another issue that has been a serious cause for concern is the inadequate coverage of the State’s beneficiaries under the National Food Security Act, which continues to trouble the State. With respect to Andhra Pradesh, the number of persons covered under the Targeted Public Distribution System is 2.68 crore, translating to 61% of the rural population and 41% of the urban population. This is grossly inadequate, considering the fact that, at the National level 75% of the rural population and 50% of the urban population are covered under TPDS. What is more disheartening is that even economically progressed States such as Maharashtra, Karnataka, and Gujarat have at least 10% higher TPDS coverage when compared with that of Andhra Pradesh. Those States have comparatively very robust public finances and tier – I cities and are not subject to the deficiencies as Andhra Pradesh is. This has resulted in a large number of needy and deserving persons being uncovered. Close to 56 lakh additional families are covered by the public distribution scheme being implemented by the State Government in addition to what Central Government has covered. The State Government is being overburdened due to this. I request that the State’s data be revisited and corrected. I urge that a comprehensive view be taken on the poverty levels in the State, wider coverage of the population of Andhra Pradesh under TPDS be ensured and the anomaly be corrected.
I, therefore, request the hon’ble Chairman of this Council to understand the plight of the people of Andhra Pradesh State and make the necessary recommendations to address our concerns. 

I look forward to comprehensive discussions on many more issues concerning my State during the item-wise discussion. I request the Hon’ble Union Home Minister to form a committee under his chairmanship to settle our issues in a time-bound manner, upholding the esteem of the council.