After almost losing steam a year ago, Andhra Pradesh’s demand for special category status has once again become a bone of contention, both in the state and at the centre. The ruling Telugu Desam Party (TDP) has quit the Bharatiya Janata Party-led (BJP-led) National Democratic Alliance, and five MPs from the opposition YSR Congress Party have submitted their resignations to the speaker of the Lok Sabha.
What is special category status?
Special category status was granted in the past by the National Development Council on the recommendations of the Planning Commission to states that needed special consideration. The features include: (i) hilly and difficult terrain; (ii) low population density and/or a sizeable tribal population; (iii) strategic location; (iv) economic backwardness; and (v) non-viable nature of state finances.
Eleven states have been granted special category status in the past. These are Arunachal Pradesh, Assam, Himachal Pradesh, Jammu & Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Uttarakhand.
What changed with the 14th Finance Commission?
Though the commission did not explicitly prohibit the government from assigning special category status to any state, it merged both Plan and non-Plan transfers to states and did not distinguish between special and general category states in determining transfers. It took a comprehensive view of the commonalities and special characteristics of individual states to arrive at expenditure requirements.
Had Andhra Pradesh been promised special category status?
While there is no mention of special category status in the Andhra Pradesh Reorganisation Act, an assurance of special category status for a period of five years was given on 20 February 2014 by then prime minister Manmohan Singh on the floor of the Rajya Sabha. During the 2014 election campaign, the BJP promised to extend it to 10 years.
So why is the BJP government reluctant now?
In 2016, Union finance minister Arun Jaitley did not explicitly rule out granting special category status to Andhra Pradesh. Speaking in the Rajya Sabha, Jaitley said tight fiscal conditions make it difficult to grant special category status to Andhra Pradesh. Recently, he has been more categorical about his inability to grant special category status to the state.
Has the government suggested an alternative?
Jaitley has suggested that Andhra Pradesh could be given a ‘monetary equivalent’ to special category status. However, the state has not agreed—by now, the issue has become an emotional one for people of the state, who feel they have been wronged by the central government.