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Polity & Governance
Mahesh

15/06/24 11:57 AM IST

Special Category Status for Andhra Pradesh

In News
  •  The Andhra Pradesh Reorganisation Act, 2014, which bifurcated unified Andhra Pradesh into two States, was notified on March 1, 2014 and had come into force from June 2, 2014.
Criteria for SCS
  • The concept of SCS was first brought into existence through the recommendations made by the Fifth Finance Commission in 1969.
  • It was done to benefit a few States through special grants from the Centre. The focus was on States that had socio-economic issues and geographical disadvantages, such as hilly States.
  • Five factors stood as the qualifying benchmark for the granting of SCS — States that comprise a majority tribal population, low density of population, hilly States and close to international borders, States that have socio-economic and industrial backwardness, and lack of adequate State finances.
  • At present, the States that have the SCS include Arunachal Pradesh, Assam, Himachal Pradesh, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, and Uttarakhand.
  • It was debated that Andhra Pradesh, based on the above strictures, does not qualify for the SCS and that the Finance Commission had already annulled it.
  • However, the Centre offered Andhra Pradesh a special package (SP). 
Benefits of Special Package
  • Having been convinced that the SCS was ruled out by the Union Government, the first Chief Minister of residual Andhra Pradesh (2014- 2019), Chandrababu Naidu of the TDP, who was then part of the NDA alliance, agreed for the SP.
  • The SP included the recognition of the Polavaram irrigation project as a national project with full funding from the Union Government, tax concessions and special assistance.
  • Though Mr. Naidu accepted the SP, it was termed as a betrayal by the Opposition parties, including the Yuvajana Sramika Rythu Congress Party (YSRCP). 
  • The 14th Finance Commission instead of SCS had increased tax devolution to the State to 42% and also introduced revenue deficit grants for States facing a revenue gap, which Andhra had already received.
  • SCS, which has an arrangement of funding States in a ratio of 90:10 (90% the Centre and 10% the State), may not be a ruled out chapter for Andhra Pradesh.
  • The Union Government can take a call and refer it to the 16th Finance Commission and the NITI Aayog, and can get back to the arrangement. 
Issue with SCS
  • Ever since the bifurcation of the State, it has been facing a revenue deficit. Additionally, the debts of the State have shot up enormously.
  • Most of its projects and development have come to a standstill and on top of that the building for a new greenfield capital at Amaravati is pending and needs funding.
  • People are hopeful that since the TDP is again part of the NDA alliance which does not have a clear majority in the Centre, and is dependent on the MPs from Andhra Pradesh, it would be the right time to press for the SCS, for the overall development of the State. 
Source- The Hindu

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