This is the Central Assistance to Andhra Pradesh!!

8 Sep, 2016 19:33 IST|Sakshi

The Central Assistance announced for Andhra Pradesh on Wednesday by Union Finance Minister Arun Jaitley has raised a storm what with spontaneous outburst of anger and protests at various places. The Government categorically said Special State Status was not possible. Here are the salient points of the Central Assistance announced by Jaitley.

The Central Government ‘s commitments to Andhra Pradesh emanate from four basic documents, ie., the provisions of the Andhra Pradesh Reorganisation Act, 2014, the report of the Fourteenth Finance Commission, the statement of the then Prime Minister before the Parliament on on February 20, 2014 and the Report of Niti Ayog vice-chairman on December 1, 2015 on Developmental Support to the Successor State of Andhra Pradesh under the Andhra Pradesh Reorganisation Act 2014.

The Central Government’s commitments to the State of Andhra Pradesh are:

AP REORGANISATION ACT

* To fill the resource gap for the year 2014-15 on the basis of standardized expenditure for that year, . a part of the revenue gap compensation to atune of Rs.3,979.5 crore has already been paid and the balance is being paid in annual instalments.

* An amount of Rs 2,500 crore has already been paid as support for creation of new capital of State of Andhra Pradesh and a balance of Rs.1,000 crore would be paid in due course.

* An amount of Rs.1,050 crore has been disbursed as special package for backward areas and a further amount of Rs.1,050 crore would be paid in the coming years.

* The Polavaram Project cost will be funded by the Central Government in the following manner: (i) It will provide 100% of the remaining cost of the irrigation component only of the project for the period starting from April 1, 2014, to the extent of the cost of the irrigation component on that date.

(ii) In view of the recommendations of the Vice Chairman NITI Aayog that it will be appropriate for the State of Andhra Pradesh to execute this project, the Government of India has agreed to the State’s request for the execution of the project by the State Government on behalf of the Government of India.

* Government of India has already legislated for fiscal incentives of enhanced investment allowance and accelerated depreciation. They will come into effect once notified, after the State of Andhra Pradesh identifies the eligible backward areas.

* In respect of educational and other institutions:

(I)A Petroleum University has already been established.

(II) The IIT has already been functioning from a transit campus and the main campus is being constructed.

(III) The National Institute of Technology has already been functioning since September 2015 in a temporary campus and its main campus is being constructed.

(IV) The Indian Institute of Information Technology, Kurnool has already started functioning from the temporary campus and would start functioning and its main campus is being constructed.

(V) The site for the Central University in Anantapur district has already been selected.

(VI) The Indian Institute of Science Education and Research has been established in Tirupati.

(VII) The Indian Institute of Management has been established at Visakhapatnam.

(VIII) An All India Institute of Medical Sciences has been approved at Guntur and the land for the same is being taken over.

(IX) A Tribal University is to be established in the State of Andhra Pradesh for which a Site Selection Committee of the State has already approved the land.

(X) A National Institute of Disaster Management is being established in the State of Andhra Pradesh for which identification and takeover of the land is being completed.

* In-principle approval for the establishment of a major port at Dugarajapatnam in Andhra Pradesh on PPP basis, subject to feasibility.

* Proposals with regard to the Steel Authority of India, Indian Oil Corporation/HPCL to set up units in Andhra Pradesh are being examined as provided in the Reorganisation Act.

(iii) Regarding airports:

· In Vishakhapatnam, international flights are already operating. For further expansion, land has been identified at Bhogapuram. The State is to acquire and hand over land for development by AAI as per the standard terms for such development or develop on its own by PPP. A techno economic feasibility report is to be undertaken by State Government.

* For Vijayawada, MoU has been signed by AAI with Govt. of Andhra Pradesh to develop the existing terminal. The State is to acquire 698 acres of land required for the expansion as per the standard terms.

* For Tirupati, the new terminal was inaugurated by the Prime Minister on October 22, 2015. A new apron for parking for 3 aircraft has been completed. The existing runway, apron and terminal building are adequate for commencing international flights. Expansion of new apron for parking additional 4 aircraft and isolation bay is under construction within the available land.

* The National Highway Authority of India has taken several steps for establishment of the National Highways in the State of Andhra Pradesh. The Railways is considering measures for establishing a rapid rail and road connectivity between the new proposed capital of Andhra Pradesh with Hyderabad and other cities in the region. The Government of India is actively considering proposals for the establishment of the Metro Rail in Visakhapatnam and Vijayawada-Guntur-Tenali urban area.

* As per the Fourteenth Finance Commission’s award, the enhanced devolution amount due to Andhra Pradesh is being paid in entirety. This has resulted in an increase of Rs.7,787 crore in tax devolution in 2015-16 compared to 2014-15, a growth of 55%. The revenue deficit grants for each of the years recommended by the Fourteenth Finance Commission will also be paid by the Government of India to the State of Andhra Pradesh. The same has been done for the year 2015-16 and 2016-17.

14th Finance Commission Report on Special Status“We did not make a distinction between special and general category states in determining our norms and recommendations…... In our assessment of State resources, we have taken into account the disabilities arising from constraints unique to each State to arrive at the expenditure requirements. In this regard, we have observed that the North-eastern and hill States have several unique features that have a bearing on their fiscal resources and expenditure needs, such as low level of economic activity, remoteness and international borders. Our objective has been to fill the resource gaps of each State to the extent possible through tax devolution. However, we have provided post-devolution revenue deficit grants for States where devolution alone could not cover the assessed gap…...We are of the view that intra-state inequality is within the policy jurisdiction of the States and provisioning of adequate resources through tax devolution should enable them to address intra-state inequalities in an effective manner.”

SPECIAL STATE STATUS

* With regard to the grant of special status, an apparent conflict has set in, between the statement and the recommendations of the Fourteenth Finance Commission which came subsequently. Following the recommendations of the 14th Finance Commission, the class of special category states ceases to exist. However, the Central Government has agreed to give a special assistance measure for Government of Andhra Pradesh for five years, which would make up for the additional Central share the State might have received during these years, i.e. 2015-16 to 2019-20. This will be in the form of Central Government funding for externally aided projects.

* Thus the Government of India has effectively addressed all commitments made to the State of Andhra Pradesh in the Andhra Pradesh Reorganisation Act, the Fourteenth Finance Commission and the statement of the then Prime Minister on February 20, 2014.