Finance Commission Did Not Address AP Needs: Naidu

Andhra Pradesh Chief Minister N Chandrababu Naidu said that the 14th Finance Commission had not addressed the development needs of Andhra Pradesh after the unscientific bifurcation, and had denied the state a level-playing field.

Addressing a press conference in Kuppam on Wednesday, the Chief Minister said that the Finance Commission had not made any specific award for Andhra Pradesh, though it acknowledged that Andhra Pradesh had suffered fiscal damage as a result of the reorganization.

"The Finance Commission has treated Andhra Pradesh on par with other states, both for the purpose of tax devolutions and the revenue deficit grant," the Chief Minister said, expressing his dissatisfaction.

"Even the grant of Rs 2,429 crores for NDRF and SDRF suggested for disaster management for the next five financial years is insufficient as AP is in the seismic zone and is vulnerable to several disasters," he said, adding that the grants for rural and urban local bodies at Rs 8,654 crores and Rs 3,635 crores, respectively, too were insufficient.

He added that the Commission's estimates clearly indicated that Andhra Pradesh would be the only state in the country (other than the special category states) that would continue to have a revenue deficit even in fiscal 2019-2020 while several other states would close the year with a surplus budget.

While the Commission's increased devolution to states was a welcome move, the Chief Minister said that the award of Rs 2,06,819.24 crores over the next five year period (2015-16 FY to 2019-2020 FY) only addressed the revenue expenditure needs (administration and maintenance costs of governance) of the state, and did not take into consideration the development challenges of an agrarian state that did not have adequate space for revenue elasticity, lacked a capital city and the ecosystem for development, and was devoid of major growth engines.

This clearly illustrated that Andhra Pradesh, despite being the 8th largest state in terms of population, would be at the bottom (compared to other states) during the next five years in terms of fiscal performance, he said.

The Chief Minister said that he sincerely hoped that the Central government would take note of the concerns of the people of Andhra Pradesh and take comprehensive measures in the upcoming Union budget for creating a level-playing field and enable the state to catch up with the national development momentum in the spirit of cooperative federalism. (INN)