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Centre Has Extended Assistance Of Rs 1.72 Lakh Crore To AP


The Centre has extended financial assistance of over Rs 1.72 lakh crore to Andhra Pradesh since June 2014 even though the N Chandrababu Naidu government has been complaining about "meagre allocations" to the state. According to a 'fact-sheet' prepared by the Centre, the Narendra Modi government sanctioned Rs 1.12 lakh crore under different heads to the state after its bifurcation in June 2014. Besides, projects worth Rs 60,000 crore were sanctioned by the Ministry of Road Transport and Highways in December last.

The Railways sanctioned Rs 20,236 crore, a major share of which will go for doubling of tracks, while the Defence Ministry has lined up projects worth over Rs 5,700 crore for AP. The Commerce and Industry Ministry has decided to extend Rs 2,700 crore of which Rs 1,900 crore has already been released, while the HRD Ministry will spend Rs 7,000 crore for setting up institutes like IIT and IIM.

The state also received at least Rs 15,000 crore by way of routine grants the Centre extends to states annually. On the contentious issue of bridging the Rs 16,000 crore revenue deficit presumably suffered by AP due to bifurcation, the note prepared by the Government of India says, Rs 2,303 crore was released during 2014-15 to meet the resource gap funding, while grant-in-aid of Rs 6,609 crore was given towards revenue deficit.

AP will get a sum of Rs 2,06,819 crore as 'enhanced devolution' over the next five years (Rs 41,364 crore per year) and an additional Rs 29,374 crore per annum for five years as 14th Finance Commission grant, the note says. It says that out of the total sanctions of Rs 1.72 lakh crore, a sum of over Rs 35,000 crore has already been released for various projects, while several financial releases were stuck because the state government could not furnish the requisite utilisation certificates for the disbursed amount or failed to come up with detailed project reports. The state, according to the note, was found to be 'diverting' funds for "purposes other than those specified".

Of the Rs 850 crore released for AP's new capital Amaravati, Rs 500 crore was meant for construction of Raj Bhavan, state Assembly and Secretariat and the balance for other works. Sources in the state's Finance Department admitted to the diversions. Amid indications that the money was spent on irrigation projects, a senior Finance Department official said, "These are some general adjustments we normally make every year. Since nothing concrete has been finalised with regard to the new capital, we could not spend money there."

Union Urban Development Minister M Venkaiah Naidu got Rs 1,000 crore released by the Finance Ministry in March 2015 as 'one-time special assistance' for the new capital region. The two main cities in the capital region -- Vijayawada and Guntur -- were supposed to spend Rs 460 crore on developing storm water drainage system and Rs 540 crore on underground drainage and sewerage system. However, tenders are yet to be invited.

"Most of the financial sanctions are in accordance with the provisions made in the AP Reorganisation Act, 2014. For instance, we have released Rs 700 crore to seven backward districts (four in Rayalaseema and three in north coastal Andhra) in the last two years.

"Similarly, industrial incentives like 15 per cent additional investment allowance and 35 per cent additional depreciation on new plant and machinery for manufacturing industries in the backward districts are being granted," a senior AP cadre bureaucrat in the Government of India said.

State Finance Minister Yanamala Ramakrishnudu says AP should be treated "separately" because it is a "peculiar" case. "Ours is a peculiar case. We should be treated separately and given grants as per the Reorganisation Act. Normal grants cannot be shown as a special financial package," Ramakrishnudu said. "They are showing crores of rupees for educational institutes (like IIT, IIM) but the state government is giving the land and now we are also being asked to build compound walls. So, these funds cannot be treated as special," he said.

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