AP Gets Raw Deal, Union Budget Ignores State's Requirements

Andhra Pradesh, whose long-pending demand to have its own railway zone was ignored by the railway budget for 2016-17

Published: 29th February 2016 07:06 PM  |   Last Updated: 29th February 2016 07:13 PM   |  A+A-

HYDERABAD: In a double whammy to Andhra Pradesh, whose long-pending demand to have its own railway zone was ignored by the railway budget for 2016-17, even Union budget for the coming fiscal year, introduced in Parliament on Monday, seems to have not paid any heed to the financial requirements of the reorganised State to face the challenges thrown up by bifurcation including construction of new capital city.

The Only Incentive

The only incentive to the State appears to be the proposal to constitute a panel to study the possibility of enhancing the upper limit to avail borrowings under Fiscal Responsibility and Budget Management (FRBM) Act and determine whether there should be a range for fiscal deficit targets to provide the necessary policy space to governments. AP has been urging the Centre to relax the FRBM rules for State to avail loans for overcoming problems being thrown up post-bifurcation.

True to the fears of Chief Minister N Chandrababu Naidu, who the other day had reportedly expressed doubts over Centre doing some favour to AP in the Union budget during his interaction with his party MPs, Union Finance Minister Arun Jaitley preferred to remain silent in the Union budget on key demands of AP such as special financial package, special grants to backward districts, funds to tackle the revenue deficit and allocations for Amaravati's construction, leave alone mentioning the 'special category status' issue, which has now become a pipe dream for the State.

Similar to the way current fiscal year's Union budget had allocated Rs 100 crore for the Polavaram project, coming financial year's budget also earmarked only another Rs 100 crore for the project, whose estimated cost is around Rs 20,000 crore. This development took place exactly a day after Chief Minister Naidu alarming over Union government's "non-cooperation" to AP to complete the project before 2019 polls during a meeting with his party MPs.

Much to the chagrin of the TDP government, the BJP-led NDA at Centre, in which the yellow party is also a partner, not seems to have taken into consideration the aspirations of Naidu to build a world-class capital city, Amaravati, for AP, while preparing the Union budget. Proving this, the budget almost ignored AP's financial needs to construct Amaravati. 

Even though, Naidu had sought Rs 4,000 crore for the construction of core capital city for next fiscal year, by knocking on the door of Prime Minister Narendra Modi and Finance Minister Jaitley repeatedly, the Union budget has not focused its attention on Amaravati. The only succour to AP is that the budget allocated Rs 106 crore for the construction of metro rail in Vijayawada, which falls under the new capital region.

The budget ignored AP's plea for allocation of annual development grant of Rs 200 crore to each of the seven backward districts of the State.

Providing some comfort to the State, the budget earmarked a small quantity of grants to the national level educational institutions, which are being set up in AP as per the promise made in the AP Reorganisation Act, 2014.

Centre appears to have not considered AP's pleas while allocating grants and loans earmarked to various sectors and States in the budget such as Special Assistance, externally aided Projects and assistance to States from Central Roads Fund.

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