The Centre on Wednesday said “constraints as per the 14th Finance Commission report” did not allow the Narendra Modi government to grant special category status to Andhra Pradesh, according to the Hindustan Times. Finance Minister Arun Jaitley announced a special five-year package for the state instead. He said the Centre had decided to implement a Special Assistance Measure “in such a way that it largely compensates the losses caused to the state for being denied” the status.
The package, announced following hectic last-minute negotiations between the Centre and the N Chandrababu Naidu government, is yet to be approved by the Union Cabinet, Finance Minister Arun Jaitley told reporters. The amount of the package will be announced on Thursday, The Hindu reported.
Jaitley said, as part of the package, the state will receive tax concessions as well as a new Railway Zone after consultations with the Railways Ministry. He further said that the Centre will bear the entire cost of the Polavaram irrigation programme, which was declared a national project in April 2014, The Deccan Chronicle reported.
The package is based on various sections of the Andhra Pradesh Reorganisation Act of 2014 as well as recommendations made by the 14th Finance Commission, former Prime Minister Manmohan Singh and the Niti Aayog in 2015.
Jaitley had told the Lok Sabha on August 2 that the National Democratic Alliance government at the Centre was looking into Andhra Pradesh’s demand for a special category status. The demand for the status has been a top priority for the state government since the bifurcation of the parent state into Andhra Pradesh and Telangana in June 2014.