Andhra Pradesh is among the states of India which have been witnessing tremendous growth from 2014 with an annual average CAGR of nearly 9% and is estimated to grow with over 12% CAGR during next five years. Special status is turning out as a big deal in AP and the demand to identify AP as special category gained momentum after state bifurcation into Telangana and Andhra Pradesh in 2014. Andhra Pradesh is facing massive revenue deficit of INR 16,000 crore for 2014-15. The revenue deficit for the is estimated to be INR 416 crore for 2018-19 as per the recent government organizations publications.
What is a special status for AP? Political parties have been demanding special status after the announcement in 2017. Special status means the allocation of budget in terms of funds from the central government and special status is given to states based on certain parameters including low resource base, low population density, deficit budget, economic and infrastructural backwardness and many other parameters.
Special Railway Zone in Vishakhapatnam, an alternative port in Dugarajapatnam Port, Kadapa Steel Plant, special financial assistance to backward regions of Rayalaseema, Uttar Andhra and national-level institutions are among the key promises made to the Andhra Pradesh during state bifurcation. Vizag Railway Zone, Polavaram Irrigation project, special development package for the backward, educational institutions, 3% subsidy for the promotion of industrial sector, tax incentives for the industrial and power generation, industrial corridor and various others are the key promised segments pertaining to diverse industry verticals. Most of the unfulfilled promises made people of AP protest by demanding the special status.
SPECIAL STATUS BENEFITS:
- 90% of the special grants will be available to the state in terms of taxes, grants, loans and other allowances which have fewer chances of repayment.
- Huge industrial taxes and other expense reductions and there are 11 special states in India.
- Scope for the reduction of machinery expenses granted on the plant by 30%
- 3% discount will be provided under special status on working capital for the establishment of industries. 50% will apply to electricity industry costs for approximately 10 years.
- The Significant share of 30% of the central budget is allocated to special status states and these states avail themselves the benefit of debt swapping and relief schemes.
- The central government affords 90% of the overall expenses of the states and grant 10% of the loan.
List of 11 Special status states in India 2017 include Arunachal Pradesh, Assam, Himachal Pradesh, Jammu & Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Uttarakhand.
Difference between special status and special category status?
There is a huge difference between special status and special category status. Special status is guaranteed by the constitution of India approved by two-thirds majority of the houses of the parliament. Special category status refers to the provision of making specific state as the primary preference in the form of central assistance and tax breaks. Special status empowers legislative and political rights while special category status deals with economic, administrative and financial aspects.