Andhra Pradesh Chief Minister and Telugu Desam Party president N. Chandrababu Naidu has decided to no longer demand special status for his state after the Centre pumped in a Rs 2.25 lakh crore special economic package for AP, which will be revenue deficit for another five years.

Naidu decided to call a truce with Prime Minister Narendra Modi on the special status demand after agitation by different parties and public outfits over the same fizzled out, following the Centre’s announcement detailing the package on 7-8 September. As the package surpassed the expectations from a special status, the TDP, a constituent of the NDA at the Centre, expressed its full satisfaction with the PM’s gesture.

Finance Minister Arun Jaitley called on Naidu several times and explained to him that the package was cleared by Prime Minister Narendra Modi and had the full backing of the Centre. The package would be followed by allied announcements like a special railway zone for Visakhapatnam soon. 

Tollywood super star and Jana Sena president Pawan Kalyan, who vowed to hold rallies in all 13 districts of AP to champion the cause of special status has deferred his schedule after the development. YSE Congress president Y.S. Jagan Mohan Reddy had called for a bandh on 10 September in AP but the lukewarm response to it from the public prompted the main Opposition party to put the special status demand on the backburner.

Congress and the Left parties are keen on continuing the agitation for special status for AP, as it was their national leaders who promised and demanded it in Parliament when the combined state was bifurcated. But the parties are not strong enough to either mobilise or sustain the stir without the support of YSR Congress.

An intelligence report submitted to the CM last week also said that the youth were convinced that it was futile to fight for special status after the Centre’s recent grants. Naidu has realised that the growing distance between TDP and the BJP due to the raucous demands made by his ministers and MPs on the special status issue may hurt his interests. But now he is working to bridge the gap with BJP.

Two senior ministers who were with the CM on the crucial two days when the Centre announced the package, told The Sunday Guardian that three salient features of the Finance Minister’s statement have convinced Naidu to welcome the package. First, the special attention paid to AP by the Prime Minister to bail it out of its financial difficulties. Second, the Centre’s readiness to bear the entire cost of the construction of the multipurpose Polavaram irrigation project across Godavari River. Third is the Centre’s readiness to prepare a timeframe for implementing the Rs 2.25 lakh crore package in the next few years. Apart from this, the Centre has also agreed to extend tax sops to industries to be set up in the seven backward districts of AP.

“We were told by FM Arun Jaitley that as the package was cleared by the PM and PMO, it would be followed at the highest level and its implementation would be cent per cent. On the Polavaram project, we were only expecting 90% cost contribution from the Centre, but the FM announced that the Centre would bear 100%. What more do we need?” said a minister, seeking not to be quoted.

As per the 2014 calculations, the cost of the Polavaram project was Rs 16,000 crore, but now it has gone up to Rs 24,000 crore. The state has so far spent around Rs 7,500 crore and now the Centre would reimburse that amount too. CM Naidu is happy about the fact that tax incentives would be extended to industries to be set up in the backward districts—three in the north-coastal region of Srikakulam, Vizianagaram and Visakhapatnam, and four in Rayalaseema region of
Chittoor, Anantapur, Kadapa and Kurnool. Six developed districts in the coastal region—East Godavari, West Godavari, Krishna, Guntur, Prakasam and Nellore—
are excluded from the tax sops.

“As part of special status, we were expecting tax incentives to the entire state. If that was granted, we would have faced pressure to allot land to industries in developed districts including capital city, Amaravati,” said Municipal Minister P. Narayan.


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