A Sunrise State (AP) waging war Agianst a party which is ruling in 19 states (BJP)

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The Andhra Pradesh Reorganisation Act, 2014 is an Act of Indian Parliament that bifurcated the state of Andhra Pradesh into Telangana and the residuary Andhra Pradesh state.The Act defined the boundaries of the two states, determined how the assets and liabilities were to be divided, and laid out the status of Hyderabad as the permanent capital of new Telangana state and temporary capital of the Andhra Pradesh state. Union Cabinet formed a Group of Ministers (GoM) committee in August 2013 led by the Union Home Minister, Sushil Kumar Shinde to look into the suitability of a division of Andhra Pradesh. The members included the Finance Minister, P. Chidambaram, Health Minister Ghulam Nabi Azad, Petroleum Minister & Natural Gas Minister Veerappa Moily, Union Rural Development Minister Jairam Ramesh and minister of state in PMO Narayanaswamy. Amidst a lot of protest in the Lok Sabha (the lower house of the Parliament of India), the bill was introduced by the speaker Meira Kumar at 12:00 PM on 13 February 2014.

"On 18 February 2014, the Telangana Bill was passed by the Voice Vote in the Lok Sabha with support from the Bharatiya Janata Party (BJP) while the live telecast of the House was cut off and the doors and galleries were sealed."

The Bill was drafted based on the boundaries of the proposed Telangana State as approved by the Union Cabinet in its meeting on 3 October 2013. The new state of Telangana would have 119 elected members of its legislative assembly, 40 members of its legislative council, 17 members of the Lok Sabha and 7 members in the Rajya Sabha. The residuary state of Andhra Pradesh would have 175 elected MLAs, 50 MLCs, 25 MPs of Lok Sabha and 11 MPs of Rajya Sabha.

Following the bifurcation of the united state of A.P. the residual state lost a large part of its revenue due to Hyderabad remaining as the capital of Telangana. In a debate in the Rajya Sabha on the A.P. Reorganisation Act on February 20, 2014, then Prime Minister Manmohan Singh had said that SCS would be “extended to the successor State of Andhra Pradesh for a period of five years.” This oral submission by the then PM has been the basis for A.P.’s claim to the status.

What is the special category status?

SCS is a financial aid given to states that fit into specific criteria and are granted mainly because of the inherent features of these states and the relatively lower income base. According to PRS legislative research, the criteria include hilly and difficult terrain, sizeable share of tribal population, economic and infrastructural backwardness, low population density, strategic location along the borders with neighboring countries and non-viable nature of state finances.

Right now there are 11 states that have been granted a SCS. Those are Assam, Jammu and Kashmir, Nagaland, Arunachal Pradesh, Manipur, Sikkim, Himachal Pradesh, Meghalaya, Tripura, Uttarakhand and Mizoram.

All the eight North-Eastern states have been categorized as special category. Most of these states have hilly-terrain and have a considerable tribal population.

At present allocation of funds to special and general category states is decided based on the Gadgil-Mukherjee formula which is revised from time to time and allocated by the centre.

Around 90 percent of funds that is allocated to the special category states is given as grants, which need not be paid back, while only 10 percent as loans which have to be returned.

States with SCS can also enjoy concessions in excise and customs duties, income tax rates and corporate tax rates as determined by the government.

Why is it such a big deal in AP?

The demand to identify Andhra Pradesh as a Special Category State gained momentum after the state split into two. India’s 29th state, Telangana was formed which also took away AP’s capital, Hyderabad.  Chandrababu Naidu from the Telugu Desam Party (TDP) won the state elections in the newly formed Andhra Pradesh and became its Chief Minister. Naidu was quoted as saying that the split was a raw deal for AP, as it has no capital, no infrastructure and no institutions in Seemandhra.

Hyderabad was not just the capital but also a rising IT hub with about 80-90 per cent of jobs. Though AP got to share Hyderabad as the capital with Telangana for 10 years, it now has the burden to build its own capital at par with Hyderabad and provide facilities that will attract investments, to keep the state going. Andhra Pradesh thus had lost the revenue from Hyderabad and has the additional burden.

The then ruling Congress promised AP SCS for five years, while the BJP in opposition also joined the chorus and demanded that the period be extended to 10 years instead. However after the BJP government came to power, there has been no move to give SCS to the state.This has further angered the people of the state.

How beneficial is inclusion in this class for a state?

The special-category states get significant excise duty concessions, persuading industry to relocate/locate manufacturing within their territory. This has been a sore point with neighbouring general-category states. Apart from that, 30% of the Centre's gross budgetary support for Plan expenditure goes to special-category states. Earlier, 70% of the Plan assistance given to the states were loan .

Finally, BJP has given Special Package Instead Of SCS after winning in 2014. But The Special Package is not been implemented.

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