AP Special Package has cabinet approval not legal status

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After assembly elections if there is anything that the leaders of TDP sought was the center’s attention towards Andhra Pradesh. TDP has been facing criticism from people and opposition parties for not getting legal sanctity to the Special package announced by the center as a replacement to the Special Category status. The Union Cabinet approved the Special Assistance Package to the state. This doesn’t mean judicial sanctity to the package. It is just that the cabinet took its own sweet time to approve the package after the announcement made by Arun Jaitely in September 2016. A lot of them misinterpreted that the Special Package is given legal sanctity which is not the case. It just got approval of the Cabinet.

Polavaram project had several revisions on the expenditure which is ₹ 36000 crores as of 2016, while the estimates in 2011 was ₹ 16000 crores. The revised estimates and the accounts of the expenditure is not yet approved by the center. As per the special package, funding of 100% of the remaining cost of the irrigation component only of the Polavaram project for the period starting from 1 April 2014, to the extent of the cost of the irrigation component on that date will be provided. Polvaram is a multipurpose project. The center is going to sponsor only the irrigation component and not the power component. Moreover the expenditure that the cabinet will consider is ₹ 16000 which is as on 1st April 2014. But now the expenditure is doubled.

The Central Government will provide special assistance measure which would make up for the additional Central share the State might have received during 2015-16 to 2019-20, if the funding of Centrally Sponsored Schemes (CSS) would have been shared at the ratio of 90:10 between the Centre and the State. The special assistance will be provided by way of repayment of loan and interest for the Externally Aided Projects (EAPs) signed and disbursed during 2015-2016 to 2019-20 by the State. For Special Category status states, the CSS are 90:10 but for AP, the CSS will be still remain 60:40. The 30 percent of the 90 percent will not be given directly but will be repaid as part of the loans got from abroad. Instead of giving 90 percent, the center took different route as they did not want other states to ask for the same exemption. So, for the CSS the state government has to still bear 40 percent burden.

For any external assistance, the center’s approval is needed. The state government is yet to recover the money used in the last 2.5 years as part of EAP loans which accounts almost to ₹ 6000 crore. At this juncture, the approvals rate of EAP is likely to decrease.

The center so far provided ₹ 10,461.04 crore as special assistance which includes ₹ 4403 crore released during 2014-15, ₹ 2000 crore released during 2015-16 and ₹ 4058.04 in released in 2016-17. Chandrababu Naidu said that Modi government has accepted the state government’s demand to give legal status to special assistance measures. If the cabinet approval took 6 months, only the center knows how long it will take to give the judicial sanctity.

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1 COMMENT

  1. R&R cost was increased by 2014 itself because by that time land acquisition 2013 already in existence which is the main thing in increase of polavaram and also if power project is included then 960 MW of power which is most cheapest will be taken into National power grid which provides great income to GOI

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