No special status to AP, but Centre ready to pay monetary benefits

The Centre on Wednesday said no to special category status for Andhra Pradesh but promised to pay the monetary equivalent of the status for the state.

Briefing reporters here, Finance Minister Arun Jaitley said special status is nothing but a 90:10 ratio of fund-sharing between the Centre and the state where the Centre is committed to 90% of funds required for a centrally sponsored scheme.

"We are ready for 90:10 fund-sharing. In fact, it is almost me waiting to know the bank accounts where the money has to be deposited," Jaitley said at a special press conference called to brief on Andhra Pradesh issue.

He said the state had asked for loans through NABARD instead of external agencies such as the World Bank or Asian Development Bank.

"We are ready even for that so long as it does not impact the Centre's or the state's fiscal deficit. Let the state come up with a proposal and we are ready to give the funds as required," he said, adding he himself believed that the state needed assistance after Telangana was carved out of it.

He, however, said, "political issues cannot increase the quantum of funds, nor can sentiments decide the issue of money."

Jaitley's comments come in the wake of Chandrababu Naidu, the chief of Telugu Desam Party - BJP's biggest ally in South India - threatening to break the alliance if the Centre did not move forward on the special status issue.

Jaitley said every state in India had the right to same central funds after the 14th Finance Commission revoked special category status for states. "But I have been sympathetic to Andhra Pradesh because I know it suffered due to bifurcation," Jaitley said. To a further nudge from reporters about special status, Jaitley quipped, "...then why not Bihar".

Special package

"The only variation is that after the Finance Commission's report, instead of formally calling it a special category state, we are calling it a special package which gives the same monetary benefits as that of a special category state.

To a question on Congress President Rahul Gandhi's promise to give the state special category status if his party came to power, Jaitley said, "I still have to follow constitutional award of the 14th Finance Commission."

On meeting the revenue deficit of the state, Jaitley said, "the Centre has already paid Rs 4,000 crore and only Rs 138 crore remains."

The demand for special status was raised after Andhra Pradesh was bifurcated. The Centre announced a "special package" in 2016 for Andhra Pradesh but the TDP said no funds were given to the state. Jaitley, however, said that under the 90:10 scheme, the Centre has already paid for three years out of the promised five.