Special Category Status for Andhra Pradesh
The Lok Sabha was adjourned twice when
members from the Yuvajana Sramika Rythu Congress Party (YSRCP) and Telugu Desam
Party raised slogans demanding special status for A.P. Finance Minister Mr. Arun
Jaitley assured them that the government was looking at their demand.
Background
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Andhra Pradesh is asking for Special Category Status
not Special Status, there’s a big difference between Special Status and Special
Category Status.
·
Special Status is guaranteed by the Constitution of
India through an Act passed by the two-third majority in both houses of the
Parliament (example – J&K)
·
Special Category Status (SCS) is granted by the
National Development Council, an administrative body of the government.
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Andhra’s Stand
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Centre’s Stand
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Following the bifurcation of A.P., Andhra lost a
large volume of its revenue due to Hyderabad remaining the capital of
Telangana. In a debate in the Rajya Sabha on the A.P. Reorganisation Act on
February 20, 2014, then Prime Minister Dr. Manmohan Singh had said that SCS
would be “extended to the successor State of Andhra Pradesh ... for a period
of five years.” This oral submission by the then PM has been the basis for
A.P.’s claim to the status.
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In a reply to a TDP MP’s question in Parliament on
this claim, then Minister of State for Finance Mr. Jayant Sinha had said in
April 2016 that the Centre had no proposal to modify the criteria for SCS
status. And that the increased devolution as recommended by the Fourteenth Finance
Commission (which included revenue deficit grants following the bifurcation)
is already flowing to the State.
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What are the parameters?
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Low resource base, hilly & difficult terrain
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Low population density or sizeable share of tribal
population
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Backwardness, border states/ sharing the international
border
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Economic & infrastructural backwardness
·
Non-viable nature of state finances
Which States are receiving it right now?
Assam, Jammu and Kashmir, Nagaland, Arunachal Pradesh,
Manipur, Sikkim, Himachal Pradesh, Meghalaya, Tripura, Uttarakhand and Mizoram.
(Total 11)
What are the benefits which states get?
·
The Planning Commission allocates funds to states
through central assistance for state plans. Central assistance can be broadly
split into three components
ä Normal
Central Assistance (NCA)
ä Additional
Central Assistance (ACA)
ä Special
Central Assistance (SCA)
·
NCA, the main assistance for state plans, is split to
favor special category states: the 11 states get 30% of the total assistance
while the other states share the remaining 70%.
·
The nature of the assistance also varies for special
category states; NCA is split into 90% grants and 10% loans for special
category states, while the ratio between grants and loans is 30:70 for other
states.
·
For allocation among special category states, there
are no explicit criteria for distribution and funds are allocated on the basis
of the state’s plan size and previous plan expenditures.
·
Allocation between non special category states is
determined by the Gadgil Mukherjee formula which gives weight to population
(60%), per capita income (25%), fiscal performance (7.5%) and special problems
(7.5%).
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Special category states also receive specific
assistance addressing features like hill areas, tribal sub-plans and border
areas.
·
Beyond additional plan resources, special category
states can enjoy concessions in excise and customs duties, income tax rates and
corporate tax rates as determined by the government.
Why centre hesitate SCS for Andhra Pradesh?
There are several reasons why PMO is not considering
the special category status for Andhra Pradesh seriously.
(01) Unsatisfied requirements:
According to the constitution, if a state has to be
given a special category status it has to satisfy some prerequisites.
The allocation of central assistance to states is
determined on the basis of Gadgill-Mukharjee formula, which was developed by
renowned social scientist Dhananjay Ramachandra Gadgill and later revised by
Dr. Pranab Mukharjee the present president of India. The weightage is divided among following
factors
·
Population (55%)
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Per Capita
income(25%)
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Fiscal management(5%)
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Special problems(15%)
The summary is inorder to qualify for a special
category status, the state should have a considerable population below the
poverty line and it should be having less income compared to the nation's per capita.
The special problems include the Geography should contain hilly terrains, flood
or drought prone areas, Desert areas and sparsely or highly populated areas.
As you know, the state Andhra Pradesh doesn't meet
most of the prerequisites because of the coastal plains and reasonably good
GDP, per capita.
(02) Other Factors:
At present, there are many states
demanding the special category status especially, Bihar, Rajasthan,
Chattisgharh. It will be a huge burden for the government to sustain the target
growth rate if it gives special category to all those. Also, it is not a good
time to speak about AP's special category status amid of Bihar elections.
