Hyderabad: The Sivarakrishnan committee expressed apprehension that “in any case, AP will not be accorded special category status before the Fourteenth Finance Commission Report is finalized.”
The committee also raised doubts over tax incentives to AP and opined “not to assume that Central assistance would automatically alleviate the burden upon the state to ensure fiscally sustainable development and creation of capital infrastructure in the shortest possible time.”
In this scenario, the committee said land acquisition at high costs would be a huge burden for the state.
It also said AP is in a structurally untenable fiscal position that is not of its own making, and therefore an appropriate Non-plan Revenue Deficit (NPRD) grant would be both necessary and desirable.
“However, the calculation of the volume of the grant, will depend on the view taken by fourteenth finance commission and on the basis of the state government’s memorandum.” The committee cautioned AP government about the “likely availability of fiscal space from this most important source.”
AP had indicated it needed 1,300 acres to house all the core capital functions and 20,000 acres for peripheral functions.
