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Of Special Category Status: Will Andhra Pradesh be able to win its biggest battle post bifurcation?

Maintaining its stand, Andhra Pradesh, post the bifurcation, lost a large part of its revenue due to Hyderabad being named as the capital of Telangana and remained as a residual state. The then prime minister, Manmohan Singh, during the debate in the Rajya Sabha on the Andhra Pradesh Reorganisation Act on February 20, 2014, promised that special status would be "extended to the successor state of Andhra Pradesh for a period of five years to put the state into the firm footing."

Madhu L Madhu L
New Delhi Updated on: August 05, 2019 22:54 IST
Will Andhra Pradesh be able to win its biggest battle post
Image Source : INDIA TV

Will Andhra Pradesh be able to win its biggest battle post bifurcation?

People in Andhra Pradesh on Monday reacted positively to abrogation of Article 370 of the Constitution that granted special status to Jammu and Kashmir, hailing it as a "historic move" and crediting Prime Minister Narendra Modi.

This, despite the state itself having been demanding a special status.

For the unversed, the Modi 2.0 government fulfilled its long-standing promise to scrap Article 370 on Monday, as also the Jammu and Kashmir Reorganisation Bill was passed in the Rajya Sabha.

A question arises: Will Andhra Pradesh now be able to achieve what it set out for?

Ten states -- Assam, Arunachal Pradesh, Himachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, and Uttarakhand -- enjoy the Special Category Status and five states -- Andhra Pradesh, Bihar, Goa, Odisha and Rajasthan -- have long been demanding for it.

After his triumph in the 2019 assembly election, Andhra Pradesh Chief Minister YS Jagan Mohan assured his people he would continue pressing the Centre to grant Andhra a Special Category Status.

Andhra Pradesh was bifurcated on June 2, 2014, and Telangana emerged as a different state. Before Jagan, TDP chief -- and former chief minister -- Chandrababu Naidu had also been vocal in his demand for a special category status for the state. On February 11 this year, he held a day-long fast pressing for his demand.

Maintaining its stand, Andhra Pradesh, post the bifurcation, lost a large part of its revenue due to Hyderabad being named as the capital of Telangana and remained as a residual state.

The then prime minister, Manmohan Singh, during the debate in the Rajya Sabha on the Andhra Pradesh Reorganisation Act on February 20, 2014, promised that special status would be "extended to the successor state of Andhra Pradesh for a period of five years to put the state into the firm footing."

The 14th Finance Commission later modified this, leaving the Andhra Pradesh government disappointed.

On January 26, 2017, Visakhapatnam, Vijayawada, Guntur, Tirupati, Nellore, Anantapur, Kakinada, Rajamundry and others saw a massive silent protest staged by activists -- to press their demand for a special status. This protest was inspired by the 2017 pro-jallikattu protests in the neighbouring state of Tamil Nadu.

Prior to the day of protest, the Andhra Government had issued prohibitory orders. To this end, police arrested a large number of protestors across the state for violating the order.

Which states can be called 'special'?

The Special Category Status is granted to the states which have been "wronged" historically, compared to other states of the country.

Jammu and Kashmir was the first state to get the Special Category Status. The other criteria to are: if the state is facing 1) a resource crunch, 2) low per capita income, 3) non-viable nature of state finances, 4) economic and infrastructural backwardness, 5) presence of sizeable tribal population, 6) hilly and difficult terrain, 7) strategic location along international borders, or 8) low population density.

Can Andhra Pradesh get it?

If Andhra Pradesh is granted a special category status, the state will be exempted from excise duty, customs duty, corporate tax, income tax and other taxes to attract investment.

The central government will bear 90 per cent of the state expenditure (given as grant) on all centrally-sponsored schemes and external aid while rest 10 per cent will be given as loan to state at zero per cent rate of interest.

The general category states get 70 per cent fund as loan and 30 per cent in the form of a grant.

Also, as much as 30 per cent amount of planned expenditure of the Central Budget will be given to Andhra. It will also avail the benefit of debt swapping and debt relief schemes.

The special states get preferential treatment in getting Central fund which attracts the development projects in the states.

Andhra Pradesh, hence, will also have the advantage of carrying forward any unused credit (to its account) to the next financial year.

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