Andhra Pradesh revenue deficit: Shocker after shocker from Centre to State

Contrary to AP’s argument that revenue deficit at the time of bifurcation was Rs 16,000 cr, Centre says it was Rs 4,117 cr only and it is final and non-negotiable.

Published: 13th August 2017 08:53 AM  |   Last Updated: 13th August 2017 08:53 AM   |  A+A-

Express News Service

When Union Minister of State for Finance Arjun Ram Meghwal had stated in Parliament recently that Andhra Pradesh’s revenue deficit in 2014-15 after the division of the combined State was only `4,117 crore and not `16,000 crore as the State argues, he was stating in a polite way that the figure he had mentioned was final and non-negotiable and the State can kiss goodbye to the remainder.

This was the latest shocker that the State government had received from the Centre.

Though the mandarins in the State government continue to ride the high horse that they would be able to persuade the Centre and get full reimbursement since the State was divided against the wish of the people, it was the Centre’s responsibility to pick up the bill. AP State Planning Board Vice-Chairman C Kutumba Rao said that the `16,000 crore figure was arrived at when the State was under the President’s rule in 2014 implying that the figure had the approval of the Centre. 

But the Centre’s argument was that the figure was inflated to `16,000 crore when the actual deficit was only `4,117.89 crore. It says that the State in 2014-15 had added debt relief burden of `7,069 crore and social security commitment of `3,391 crore.

This apart the State had paid `1,500 crore to Discoms in return for depositing of the bonds of Financial Restructuring Scheme. The Centre said that it had already paid `3,979,50 crore and therefore what all it owes to the State now was only `138.39 crore.

Even when replying in Parliament to queries raised on the issue of delimitation of Assembly constituencies in AP from 175 to 225, the reply that used to come from the ministers concerned was that there was no way the number could be increased without making any amendment to the Delimitation Act under which the next delimitation is due only in 2029. 

That all is not well with the Centre-State relations vis-a-vis transfer of funds to the State for its major projects was quite obvious for quite some time.

It came true when Chief Minister N Chandrababu Naidu visited Delhi recently to attend the swearing-in ceremony of Ram Nath Kovind as President of India. He called on several ministers during his visit and finally what emerged from the conclaves was that the State would have to fend for itself.

After compromising on Special Category Status, Naidu had accepted an equivalent in the form of a `20,000 crore special package but even that seems to be falling apart. As time is running out and EAPs are not coming through as planned, Naidu, when he met Finance Minister Arun Jaitley, asked him to treat earlier loans the State had borrowed as externally aided ones and bear 90 per cent of the net burden since there was no time for finalisation of new EAPs since only two years are left. But there seems to be no clear assurance from him either.

Another shocker was the confirmation of Centre’s indifference in releasing instalments quickly for Polavaram project whose estimates had gone beyond `40,000 crore from the original `16,000 crore. Naidu has been insisting that the Centre should bear the project cost fully since huge amounts have to be paid for land acquired under the Land Acquisition Act, 2013 because of which the estimated cost has gone up to beyond `40,000 crore.

But the Centre has been saying that since the original estimate was `16,000 crore and after deduction of `4,000 crore towards power component, which is not considered part of the project, the actual estimate would be `12,000 crore. The Centre has so far released `3,350 crore and it is yet to reimburse `3,500 crore the State has already spent. 

“The Centre has not released the money that we have spent. We have to pursue it,” Naidu said recently and said if the Centre releases funds, he would be able to complete the first phase of the project by 2019. If not, what all he could do was to ensure flow of water to the canals through cofferdam.

Another problem Naidu has on his hands is the exit of State’s lifeline - M Venkaiah Naidu - from the central cabinet. “We will have to find other means,” Naidu said cryptically when this point was raised with him recently.

As the Centre is conveying the impression that it had done enough for the State, Naidu is salvaging what is left and is firming up his political arguments that whatever work he had done so far was the maximum anybody could do in the present circumstances.

“Tell me, will it be possible for a national project to be completed in five years. Also is there any Chief Minister who had done as much as I had done for Polavaram project,” Naidu asks.Though Naidu has genuine problems and the delay might not be his fault, the opposition would not be fair to him as it is going to be an all-out war in 2019 where only victory is all that which matters.

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