“It will not take more than a minute to pull out of the NDA government at the Centre, but I will not do so as my exit will not have any impact on the stability of the BJP-led government in New Delhi. Moreover, I have nothing to gain from it,” said Andhra Pradesh Chief Minister N. Chandrababu Naidu here, referring to the Opposition demand that he should pull out of the NDA if AP is not given special status. The Opposition had called for a statewide bandh on this matter on Saturday.

Talking to the media after the adjournment of the brief session of the Assembly and the Council, which met to ratify the GST Bill, Naidu said that the TDP had two ministers at the Centre while the BJP had two ministers in his Cabinet. “Nothing will happen if we leave them, or they leave us, but the state’s development will be affected,” he said.

He said that the TDP entered into an alliance with the BJP in the interest of the newly created AP and that need is far from over; the Centre’s help is necessary at this juncture as the state alone cannot solve its problems. Though the Centre has expressed its inability to grant special status to AP, the economic package of Rs 2.25 lakh crore announced on 8 September will benefit the state, he said.

Referring to the criticism by Jana Sena party president and film star Pawan Kalyan that the Centre had given AP “two rotten laddus” in the form the Rs 2 lakh-plus crore package, the Chief Minister said that he was not ignorant that he would accept rotten laddus. “I am thankful to the Prime Minister and the Finance Minister for the package, while we continue to demand for special status,” said Naidu.

Even as the Opposition-sponsored bandh in protest against the Centre denying special status to AP went off peacefully on Saturday, a delegation of BJP leaders from the state called on PM Narendra Modi in New Delhi and thanked him for the Rs 2.25 lakh crore economic bonanza. The PM told them that they should go to the people and explain the benefits of the package.

The PM told them that they should explain the circumstances under which the Centre was unable to grant special status to AP and how the economic package was a better deal in all senses. BJP AP unit president and MP, Kambhampati Haribabu later told the media that BJP would hold three meetings in the state in the coming weeks to highlight the importance of the Centre’s economic package.

The package assumes significance as it was approved by PM Modi on Wednesday night when he was in Laos preparing for a high profile meeting with US President Barack Obama the next day. Before that, Union ministers Rajnath Singh and Arun Jaitley held a series of consultations with Chandrababu Naidu and the fine print was vetted by the PMO too.

Naidu has been facing political heat as the combined Opposition has been demanding that nothing short of a special status would do justice to the newly carved residuary state. 

The Centre decided to put an end to the controversy surrounding special status to AP, which has been raging on for the past two years, following an oral promise made by then PM Manmohan Singh in the Rajya Sabha on 20 February 2014. However, the same was not included in the AP Reorganization Act that was passed a month later. The Act has become the guiding text for granting any benefits to AP. 

The 14th Finance Commission report, which has been accepted by the NDA government, has ruled out any state in the country being granted special status. The devolution of Central funds has gone up from 32% to 42% from 2015. Similarly, any tax incentives to any state, too, would be difficult as the GST is likely to come into force from 2017.

At the same time, there has been opposition from other states like Tamil Nadu, Karnataka, Kerala, Maharashtra, Odhisa, Bihar and Bengal to AP getting special status. Already, the Centre has received demands for special status from as many as nine states, in case AP gets the same. Moreover, at least six of the 13 districts in AP are well developed, rendering difficult to extend any industrial incentives.

All this made it difficult for the Centre to grant special status to AP, but the ruling TDP, which is a constituent of the NDA, has mounted pressure on the PM that nothing short of a special status would satisfy the people who are still seething over the forcible split of the combined AP, which made them lose Hyderabad to Telangana.

The main Opposition parties, YSR Congress and Congress that got wiped out from AP in the last general elections and are now trying to regain some foothold, have claimed that only a special status, which entails industrial incentives and tax sops, would create more jobs. These parties are also alleging that a financial package will benefit only the ruling party leaders as the money is routed through projects.

The Centre has even come forward to extend special incentives to the new industries set up in AP for a period of five years by setting up a fund of Rs 500 crore, but its details will be announced after the Central Board of Direct Taxes finalises it and the Union Cabinet approves it. With this, AP would indirectly get all the benefits of a special status up to 2020.

Union Finance Minister Arun Jaitley, who announced the package in Delhi on Wednesday midnight made it clear that granting special status to AP was not possible in view of the acceptance of the 14th Finance Commission report by the Centre and that “this special economic package was far better than the special status” to the state.

Details of the package were placed on the website of the Press Information Bureau on Thursday evening and were highlighted by Information and Broadcasting Minister M. Venkaiah Naidu in New Delhi. Venkaiah Naidu told the media that “PM Narendra Modi has special concern for AP.” 

Around Rs 1.60 lakh crore of the total Rs 2.25 lakh crore worth projects meant for AP were already sanctioned, while the remaining Rs 65,000 crore worth projects are in the pipeline. Venkaiah Naidu said that unlike in the time of UPA, all the projects mentioned for AP would be provided with the statutory status by the Union Cabinet very soon.

The package includes Rs 26,000 crore for the Polavaram irrigation project across Godavari river, Rs 42,000 crore for making up the revenue deficit of AP for the next five years, Rs 9,000 crore for setting up 11 top class higher educational institutes including IIT, IIM, IISc etc, Rs 3,500 crore for the construction of government buildings in the capital city, Amaravati and Rs 3,500 crore for the development of backward areas.

The Centre has also promised to build a new seaport at Duggarapatnam, three modern airports at Visakhapatnam, Vijayawada and Tirupati, expand the Vizag steel plant by setting up a new steel plant in Kadapa district and expand the public sector oil refinery at Kakinada with an outlay of Rs 30,000 crore. The remaining money would be spent on district specific institutes and projects.

Apart from this package, the Centre has also agreed to create a new railway zone with Visakhapatnam as its headquarters. Railway Minister Suresh Prabhu, who was elected to the Rajya Sabha from AP, is expected to make an announcement on this next week.

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