The Centre stands committed to monetary equivalent of special status for Andhra Pradesh but will not give the state special status itself because of limitations imposed by the 14th Finance Commission, Finance Minister Arun Jaitley said.
The government is open to providing external funding or loans through the National Bank for Agriculture and Rural Development, the finance minister told reporters at a press briefing, adding that such loans will impact the Centre’s fiscal deficit.
Andhra Pradesh has asked for creation of a special purpose vehicle in which Nabard would fund schemes, 90 percent of which would be repaid by the central government and 10 percent by the state government.
The central government, while acknowledging that Andhra Pradesh needs assistance, refused to give any other tax incentives except those announced in the previous budgets like investment and depreciation allowance.
Parliamentarians from Telugu Desam Party, part of the ruling NDA alliance, have been protesting in Parliament for the special status.
The demand for special status was raised after the erstwhile Andhra Pradesh was bifurcated. The Centre announced a “special package” in 2016 for the state, but the TDP government says no funds have been released under the package. This has turned the focus back on special category status for the state.
The 14th Finance Commission, however, allows the central government to give special category status to only the north east states and three hill states.
Earlier today, Andhra Pradesh Chief Minister N Chandrababu Naidu indicated that the TDP would take a “right decision at the right time”, amid speculation that the party may pull out of the Narendra Modi government, newswire agency PTI reported. Naidu lashed out at the Centre saying it was "insulting the sentiments" of the people of the state by not honouring the promises made in the AP Reorganisation Act, 2014, and also in Parliament.
He warned the Centre that it would not bode well if people’s sentiments were ignored.
Congress President Rahul Gandhi yesterday reiterated his party's support to special category status for Andhra Pradesh, saying it would top the list of priorities "when we come to power in 2019". He had joined protests at Jantar Mantar demanding special status.