Chandrababu Naidu fights to save TDP's popularity as Delhi delays special incentives

Telangana may be the new state but it is Andhra Pradesh that is facing problems associated with infancy-seeking attention and special care. To grow at par with the "more developed" neighbouring states, especially Telangana, Andhra Pradesh is eyeing the coveted "special category" status, seeking a booster dose from the Narendra Modi government at the Centre in the form of status and grants over and above those offered by the Finance Commission.

While the special status seemed a done deal in the aftermath of the debate on the Andhra Pradesh Reorganisation Bill in the dying days of the previous Lok Sabha, New Delhi appears somewhat reluctant now. The problem has snowballed for Chief Minister N. Chandrababu Naidu with five people, starting with a Congress activist's self-immolation in Tirupati on August 8, committing suicide in the month of August itself to press home the demand. Politically, Naidu has come under fire after Modi's announcement of a Rs 1.25-lakh crore special development package for Bihar. Both his rivals-the YSR Congress and the Congress-have stepped up pressure, accusing Naidu of failing to convince the Modi government.

Naidu realises the pressing need for the status, which will open up avenues for more central funds. He is under siege as the state needs finances to create its new capital, Amaravati; develop existing urban nodes such as Visakhapatnam, Kakinada and Tirupati; help launch employment-generating businesses and establish new institutions after most of them went to Telangana, thanks to their location in Hyderabad. Naidu tried to impress upon Modi the need for the status, and the funds, during their meeting on August 25. "The Centre should come to our rescue and grant us a level playing field," the CM says.

Following the meeting, Modi asked NITI Aayog Vice Chairman Arvind Panagariya to prepare a road map for implementation of promises in the 2014 Reorganisation Act. He reportedly assured Naidu that the financial package will be announced thereafter. Whether it is the formal sanction of the special category status or announcing a financial package, or both, Delhi's decision is long delayed. "The bifurcation process has been cruel to Andhra Pradesh, as the economic growth engines are in and around Hyderabad," says political commentator C. Narasimha Rao. "Knowing this, both Modi and Naidu should have agreed on incentives to be offered within six months of assuming office."

With the suicides and the political heat turning out to be onerous, the Chief Minister is at his wits' end trying to alter the perception that all is lost for Andhra Pradesh, as also to cool the tempers. "Special importance for the state is top on my agenda, and both the TDP and the BJP are fighting for it," Naidu says. The Centre is playing ball-at least on the reassurance front, if not forking out anything tangible. Says Union Urban Development Minister M. Venkaiah Naidu, "We have not gone back on anything for AP. We need time to work out the scheme, as nine other states are demanding similar (special category) status."

Besides the provisions and promises made in the Reorganisation Act, 2014 the CM is banking on a long wish list to bail out his cash-strapped state. In keeping with the provisions of the act, the Centre has already given a grant of Rs 2,300 crore to meet revenue deficit, Rs 1,500 crore to construct the new capital city, and Rs 350 crore towards development of backward districts in 2014-15. But Naidu is awaiting more aid, particularly for housing, in the hope of persuading employees to move out of Hyderabad to the new capital city quickly. He is also striving to get exclusive foreign investments from Japan, Singapore and China, countries he has already visited, to develop social infrastructure (see box).

Naidu is desperate because he knows the TDP has to show tangible results for it to be reelected in 2019. But with the fund flow likely to be slower than his demand, he may discover that it is also denting his popularity.

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