Andhra Pradesh put at disadvantage by UPA's faulty division, alleges CM

Hyderabad: The residuary Andhra Pradesh has been put at a great disadvantage in terms of finance and sharing of resources by the "unilateral" and "faulty" bifurcation of undivided AP by the UPA government, Chief Minister N Chandrababu Naidu alleged on Sunday.

"They (UPA government) did not consult anybody. They did it unilaterally," Naidu alleged.

"A careful reading and analysis of the (Andhra Pradesh Reorganisation) Act reveals that it was the principal source of unfair and unjust treatment to both successor states, with the residuary Andhra Pradesh being the worst sufferer," a white paper released by Naidu today on the 'Impact of State Reorganisation' said.

"Some of its provisions are having and would continue to have adverse impact in the short term as well as the medium term on the residuary Andhra Pradesh," the white paper said.

Naidu, who is the first Chief Minister of residuary AP, had earlier issued white papers on crucial subjects like irrigation and finance post bifurcation.

Highlighting that he had made elaborate efforts to promote Brand Hyderabad during his tenure as Chief Minister of undivided AP, Chandrababu said it requires Rs four to five lakh crores to build another city like Hyderabad for (new) Andhra Pradesh.

The UPA government had divided Andhra Pradesh without even finding a capital city for the residuary state, which resulted in people of different places seeking their own city to be made the capital, he said.

"Nowhere such a thing would have happened. Nowhere division would have taken place without a capital city," the Chief Minister said.

"Three months have passed (since bifurcation happened). There is no report (from the expert committee appointed by the Centre). Now, people are coming to have doubts on me. Why he is not saying what is the capital? Why is he sitting in Hyderabad? Why he is not coming (to residuary AP)? Such misconceptions can arise now. The expert committee is doing its duty (it's given time till August end)," he said.

Liabilities and employees have been mostly divided on the basis of population, but apportionment of assets has been done on the basis of their location, Naidu said.

On the fiscal situation, the white paper said that a "diligent analysis of the potential revenue receipts and expenditure for the 2014-15 financial year and the subsequent years indicate that the residuary Andhra Pradesh is likely to face monumental fiscal challenges."

The total revenue receipts, including the state's own revenue, central taxes devolution, grants and market borrowings are likely to be less than 50 per cent of the united state, the white paper said.

"Overall, the residuary AP is at a significant disadvantage vis-a-vis Telangana state. First, the GSDP of the AP state is only 55.7 per cent of the combined state's GSDP, and the per capita income of the residuary AP state is much below the Telangana state," it said.

More significantly, the AP state's own revenues are far lower than that of Telangana; Andhra Pradesh state with 58.32 per cent of the population earns only 46.6 per cent of the VAT of the combined state.

"Further, AP has a much higher debt burden compared to Telangana, as population ratio was the sole criterion for apportionment of debt between the states. The Debt/GSDP ratio of AP is 19.4, compared to 18.1 of Telangana," the white paper said.

The resource gap for 2014-15 fiscal year is estimated at Rs 18,236 crores, which translates to about 4.84 per cent revenue deficit and 7.18 fiscal deficit.

The resource gap for the ten-month period of the current fiscal year is around Rs 15,691 crores, compared to Rs 3,555 crores surplus of Telangana.

"The current context has positioned Andhra Pradesh in a fiscally precarious position," it said.

The different state-level institutions like agricultural university, Election Commission have not been divided properly which led to disputes between the two successor states, Naidu alleged.

The allocation of All India Service officers and state-level government employees has not been done though almost three months have passed since the two states came into existence, he said.

"It is like Congress has created problems and disputes wherever it is possible," Naidu further alleged.