Narendra Modi govt denying AP funds has Chandrababu Naidu cornered

That Chandrababu Naidu will lead a hand-to-mouth existence in his role as chief minister of Andhra Pradesh was well-known even before the results came in in May 2014. Opening his innings with a revenue deficit of Rs 16000 crore, Naidu was banking on the Telugu Desam representation in the Modi sarkaar to get his way. That has not happened.

It is not as if Naidu has not tried. His several visits to the national capital have seen him pushing for special category status, a provision that was not part of the AP Reorganisation Act but promised on the floor of Parliament by then Prime minister Manmohan Singh. Subsequently, to score brownie points, the BJP promised special category status for a decade instead of the Congress dole of five years.

Once in power, the BJP has been singing a different tune. In May 2016, it firmly put the lid on the demand for special category status by lobbing the ball in the 14th Finance Commission’s court.

“As per the 14th Finance Commission’s recommendations, special status cannot be given to any State including Andhra Pradesh. There was no immediate proposal to amend relevant laws to give special status to AP. As per the provisions of Reorganisation Act, AP would get special package,’’ said Jayant Sinha when he was MoS in the Finance ministry.

TDP circles have been very annoyed with Modi’s tight-fisted approach. A senior TDP leader who is closely involved in discussions on getting funds from the Centre said, “The Centre is just not liberal with giving funds to Andhra Pradesh. They are treating us on par with other states, without realising that we have lost everything in the bifurcation of united Andhra Pradesh.''

Opposition from Tamil Nadu and Karnataka also meant Andhra could not be treated differently. Special category status coupled with Naidu’s industry-friendly image would mean he would be able to woo industry away from the two neighbours, offering several tax incentives. Both Jayalalithaa and Siddaramaiah made it clear to New Delhi that in a region that competes fiercely to attract industry, a level-playing field is a must. Naidu’s angst is that he feels he is not getting the benefit of a level-playing field in the present circumstances.

TDP leaders say that the state has got just about Rs 13000 crore in the last two years. The Andhra government was expecting close to four times that amount. So far, Andhra has got Rs 2804 crore to bridge the 2014-15 revenue deficit and Rs 7430 crore that the Finance Commission calculated the state will have in 2015-20. It is getting Rs 350 crore per year for backward areas development. In addition, the Centre is giving Rs 2500 crore for the capital, a far cry from the Rs 52000 Naidu needs to build his dream capital. BJP leaders, in private, say the Centre can hardly be expected to indulge Naidu’s extravaganza. In fact, even during the foundation laying ceremony in October 2015 in Amaravati, Prime Minister Modi came with nothing but soil and water from the Yamuna, making the TDP the butt of jokes.

Naidu’s big promise for the 2019 election is the Polavaram irrigation project, that will prove to be a boon for farmers in coastal Andhra. While it has been declared a national project, the TDP complains that only Rs 850 crore has been put into the Andhra account so far. The project is estimated to cost Rs 36000 crore and the slow trickle of money, Naidu says, is making the pace of project execution tardy. Naidu has to complete the first phase of the project if he wants to showcase it as a success story to win votes three years down the line.

With the Finance ministry closing the door on any hopes that Naidu may have had, the chief minister has once again asked the Centre to at least relax the limit set by the Fiscal Responsibility and Budget Management (FRBM) Act so that Andhra Pradesh can go in for enhanced borrowings.

Naidu’s appeal comes at a time when a committee has been constituted to examine the feasibility of having a fiscal deficit range in place of existing fixed numbers as percentage of GDP. The FRBM Act was enacted in 2003 to institutionalise financial discipline, reduce fiscal deficit, improve macroeconomic management and the overall management of public funds.

But then Naidu’s request could not be met with as a discrepancy was detected in April 2016 in the calculation of the Gross State Domestic Product (GSDP) by the Andhra government which did not match the figure provided by the central statistical office. While Andhra Pradesh pegged the GSDP at Rs 695000 crore, the central office put the figure at Rs 632000. The difference led to New Delhi putting the state’s request to raise funds from financial institutions on hold.

Andhra wants to raise at least Rs 3500 crore from the open market, besides demanding that the loan raising capacity be hiked to 3.5 percent from existing 3 percent of GSDP.

This week, Congress Rajya Sabha member KVP Ramachandra Rao tried to move a private member bill, demanding to know the reasons behind the delay in declaring special category status to Andhra Pradesh. For the Congress which was reduced to zero post the division, with no MP or MLA from the state it ruled for a decade from 2004 to 2014, it was an opportunity to expose the BJP and push the TDP to a corner. But Naidu can hardly afford to antagonise Modi at this point in time, knowing fully well that the BJP does not need the TDP’s numbers in the Lok Sabha.

Back home, Naidu is being criticised by the opposition for neither being able to get his way with the NDA government while being very Amaravati-focused. Not only his finances are in bad shape, he could not manage to shift his administration from Hyderabad to the temporary secretariat at Velagapudi near Vijayawada because the infrastructure is just not ready.