Seemandhra gets special-category status

New Delhi, March 2, 2014, DHNS:

Moving swiftly, the Centre on Sunday decided to grant special-category status to the Seemandhra region for a period of five years—a decision that would help the residuary state put its finances on firmer footing.

The Union Cabinet decision would help Seemandhra access a major chunk of Central funds in the form of grants instead of loans. This is seen as an effort by the Congress-led government to placate leaders from Seemandhra, who were opposed to the bifurcation of Andhra Pradesh.

A similar demand from Bihar has been hanging fire for at least a year, as the government had referred the matter to a committee of experts for evaluation. Bihar Chief Minister had given a bandh call in the state on Sunday to protest against the delay in the granting of special-category status.

The status enables a state to avail 90 per cent of Central funds in the form of grants and 10 per cent as loan. For other states, the ration is 70 per cent in loans and 30 per cent grants.

Prime Minister Manmohan Singh, in a statement in Rajya Sabha during discussion on the Andhra Pradesh Reorganisation Bill, had given assurance of special-category status to Seemandhra to assuage the sentiments in the region over the bifurcation. A grouse of the people of Seemandhra was that a major chunk of the state's revenues are generated from the city of Hyderabad, which falls in the Telangana region. The successor state of Andhra Pradesh would be deprived of these funds.

Since the Constitution does not permit sharing of revenue generated from one city with another state, it was decided to grant special-category status to Seemandhra.

“The special-category status is an executive decision and does not require any amendment to the law,” said Rural Development Minister Jairam Ramesh.