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Q. Special package to Andhra Pradesh: Comment on Special Category Status verses Special Package issue with reference to Andhra Pradesh.
Sep 09, 2016 Related to : GS Paper- 3 and 2

Ans :

Introduction-

Recently central government has announced special package for state of Andhra Pardesh to diffuse it from imminent loss due to bifurcation of state. Central government also announced that its support would be on continuous basis.

The package includes-

  • Rs 12,000 crore for developing infrastructure of eastern coastal industrial corridor.
  • A special grant of Rs 7500 crore will also be given to cope with revenue deficit.
  • The Polavaram irrigation project will also be completely funded by the Centre.
  • A railway zone will to be formed in the State and the Central Board of Direct Taxes will to issue two notifications on tax concessions.

Analysis – (Issue of Special category state vs special package)

  • Then central government, at the time of bifurcation announced that it will grant special category status to the state of Andra Pradesh to overcome the loss it incurred due to bifurcation.
  • To grant special category status, it needs to be either geographical disadvantageous such as hilly terrain or historical disadvantages such as socio-economic and infrastructural backwardness and unviable finances. 
  • According to above parameters prescribed to grant special category status, the state of Andra Pradesh does not qualify as a Special Category State. 
  • Hence central government has announced special package instead of special category status, to assist the State on the basis of the road map laid down in the Andhra Pradesh Reorganisation Act.
  • Special Category status could only have been a crutch, but the package might be the stimulus that it needs after bifurcation. Under the current circumstances it was felt that instead of special category, special package is a good deal.

Conclusion-

After bifurcation of Andhra Pradesh, the state needs special support to absorb loss incurred in various aspect. In this background the huge demand of Andhra Pradesh government is justifiable. As there are legal issues to grant special category status, hence central government has announced special package to Andhra Pradesh. It is right step towards development of Andhra Pradesh. Now state government should look ahead, and use the special package to boost growth and create conditions for employment generation.


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