On Naidu’s Wish List for Modi, Special Category Status for Seemandhra

When Telugu Desam Party chief N Chandrababu Naidu meets Prime Minister Narendra Modi in the capital tomorrow, he will carry with him a list of demands. Topping that wish list, said sources, is the fulfillment of the Centre’s promise that special category status will be granted to the Seemandhra regions, which will form the residual Andhra Pradesh when the state of Telangana is born next week.

That promise was made by Mr Modi’s predecessor Manmohan Singh when Parliament passed the Telangana statehood bill in February this year. (Cabinet nod to special category status to Seemandhra)

The Congress-led government had promised to accord the residual state with special category status for five years to offset losses it could suffer because of the state’s bifurcation. The Seemandhra regions bitterly opposed the split and punished the Congress in general elections and state elections held simultaneously in Andhra Pradesh.

Mr Naidu is set to be the chief minister of the residual Andhra Pradesh. His TDP partnered the BJP in the elections. It won a majority in the assembly election with 108 out of 175 seats. The partners have also won 17 seats in the Lok Sabha. With 16 seats, the TDP is the BJP’s second largest ally in Parliament.

The BJP, while extending its support to the Telangana statehood demand in Parliament, had demanded that the special category status for Seemandhra be extended to 10 years. Telangana, India’s 29th state, will come into existence on June 2.

Central financial assistance to special category states is configured in a manner that 90 per cent of it is deemed as grant, and the remaining 10 per cent is considered as a loan. The normal practice is to extend 30 per cent of planned assistance as grant and 70 per cent as loan for states who do not have the special category status.

Special category states also get preferential treatment from the Finance Commission in terms of devolution of central tax revenues.