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Business News/ Politics / Policy/  Centre announces Rs1,976 crore aid for Andhra Pradesh

Centre announces Rs1,976 crore aid for Andhra Pradesh

Including the latest round of funding, the government has provided Rs8,379.50 crore to Andhra Pradesh over three fiscals years

A file photo of Andhra Pradesh chief minister N. Chandrababu Naidu and Prime Minister Narendra Modi. Photo: PTIPremium
A file photo of Andhra Pradesh chief minister N. Chandrababu Naidu and Prime Minister Narendra Modi. Photo: PTI

Hyderabad: Under pressure from all political parties in Andhra Pradesh, including ally Telugu Desam Party (TDP), the Centre on Thursday announced a special assistance of 1,976.50 crore to Andhra Pradesh to bridge its revenue gap and for the development of seven of its backward districts.

Pressure has been mounting on the Union government to grant special category status to Andhra Pradesh two years after it split from Telangana. Andhra Pradesh chief minister and TDP chief N. Chandrababu Naidu has been lobbying hard for greater Central government funding. The opposition Congress party has been adding to the pressure.

The Centre has been reluctant to honour an oral commitment made by former prime minister Manmohan Singh in Rajya Sabha during erstwhile Andhra Pradesh’s division because of fiscal constraints and because the state doesn’t meet the criteria for a special category state. As a result, the image of the Bharatiya Janata Party (BJP) has suffered in the state.

The party is now in damage control mode and has been trying to revive its credibility in the state that sent 17 National Democratic Alliance (NDA) members to the Lok Sabha, including two BJP MPs.

Also Read: Has Andhra Pradesh missed the Special Category Status bus?

“In order to fulfil its commitment to the people of Andhra Pradesh and to compensate the financial impact arising out of the bifurcation of Andhra Pradesh, the Government of India has decided to provide further ‘Special Assistance’ of Rs.1,976.50 crore to the State during 2016-17," a government statement said.

The amount will include 1,176.50 to bridge the resource gap of revenue-deficit Andhra Pradesh and 350 crore for the development of seven backward districts in Rayalaseema and north coastal Andhra regions of the state. The Union government also committed an assistance of 450 crore for Amaravati, Andhra Pradesh’s capital city being built from scratch.

The Andhra Pradesh Reorganisation Act entrusts the Central Government with making appropriate grants in the form of special assistance to backward areas of Andhra Pradesh and Telangana, providing assistance for creation of Andhra Pradesh’s new capital and to bridge the resource gap arising due to bifurcation.

The special assistance amount for 2016-17 though is lesser than what the Centre sanctioned during the last two years.

An amount of 4,403 crore was released by the Union government during 2014-15 and 2,000 crore during 2015-16, under the provisions of the Andhra Pradesh Re-organisation Act, 2014.

Including the latest round of funding, the Narendra Modi government has provided 8,379.50 crore to Andhra Pradesh over three fiscals years.

The seven backward districts of Andhra Pradesh received 1,050 crore over the last three years at the rate of 50 crore a district a year. The government also sanctioned 850 crore up to 2015-16 for the Polvaram Irrigation Project, among others.

A sum of 2,500 crore has been allocated for capital city Amaravati in the last two years. This includes 1,000 crore released by the Union urban development ministry to implement sewerage and drainage schemes at Guntur and Vijawada cities adjoining Amaravati.

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Published: 18 Aug 2016, 10:28 PM IST
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