Centre loosens purse strings for Andhra as Jagan govt warms up to Modi

It’s raining central funds for Andhra Pradesh after a change of guard in the state, indicating political bonhomie between the Jagan Mohan Reddy-led YSR Congress Party and the BJP.

In the last two weeks, the NDA government has cleared pending bills to the tune of ₹4,200 crore pertaining to various projects and schemes, much to the delight of the new dispensation in the state. They include ₹3,000 crore towards reimbursement of funds spent by the state government on the ambitious Polavaram irrigation project on river Godavari, ₹708.65 crore under the employment guarantee scheme and ₹534 crore towards food subsidy for procurement of rice for the mid-day meal scheme and Antyodaya Anna Yojana.

“Due to strained relations between the previous Telugu Desam Party government and the BJP, the release of central funds was delayed. There was distrust particularly on the spending of funds for Polavaram project,” the official sources said.

The Centre had in the past raised objections over the way certain components of the Polavaram project were being executed by the TDP government. Under the provisions of the AP Reorganisation Act of 2014, the Centre provides funding for the irrigation project.

Last week, the Centre approved the release of ₹3,000 crore towards reimbursement of funds spent by the state government on the project. The decision followed a fresh representation made by Andhra Pradesh special chief secretary, irrigation, Aditya Nath Das. Since Polavaram has been declared a national project, the Centre has to bear the entire cost of construction. While the state government has spent ₹11,655 crore on the project till now, the Centre has released ₹6,726 crore.

The officials confirmed that the Union water resources ministry had approved the release of ₹3,000 crore towards reimbursement of expenses incurred on the Polavaram project, out of ₹4922 crore sought by the state government.

“The file has been sent to the finance ministry and from there, it would be sent to NABARD [National Bank for Agriculture and Rural Development], which will release money to the state government through the Polavaram Project Authority,” the officials said.

The Centre is also examining the revised project estimates and the state government is hopeful of getting the approval shortly, he said.

Political bonhomie

There has been a distinct change in the way the pending Centre-State issues are being addressed, after the regime change in Amaravati. Chief Minister Y S Jagan Mohan Reddy has met Prime Minister Narendra Modi twice since he took over the reins of the state on May 30. And, both the occasions were high on optics and personal chemistry between them.

On his part, Jagan has made it clear that he would adopt a ‘non-confrontationist’ approach towards the Centre and Modi who, he said, has been ‘blessed by God with massive mandate’. Since the TDP, which faced severe drubbing in the April 11 elections, is the common enemy for the YSRCP and BJP, there is a certain warmth in the relationship between the two parties.

However, Jagan and his party leaders say that their fight for the special category status for Andhra Pradesh would continue, despite the Centre firmly ruling out granting special status to any state in the country in the light of the 14th Finance Commission report.

It remains to be seen how long Jagan can afford to stick to his position on the special status issue.

While approving the release of ₹3,000 crore immediately, water resources ministry officials said that the balance of ₹1,929 crore would be released once the utilization certificates were submitted. The previous TDP government had faced criticism that it did not submit the utilisation certificates on time.

Meanwhile, the Union rural development ministry approved the release of another ₹708.65 crore under the employment guarantee scheme to Andhra Pradesh. In the last week of May, the Centre released ₹534 crore towards food subsidy for procurement of rice for the mid-day meal scheme and Antyodaya Anna Yojana.

“It is clear that the Centre did not release funds earlier due to political reasons but it is doing now only because Jagan is cosying up to the BJP,” TDP spokesman Rajendra Prasad said.

Confrontation not an option

Confrontation with the Centre is certainly not an option for Jagan as he has inherited messy finances and needs generous help from the union government to fund the ongoing projects as mentioned in the bifurcation act.

The state’s finances are in a mess while the people’s expectations are sky high.

After leading his party to a landslide victory, bagging 151 seats in the 175-member Assembly and 22 out of 25 Lok Sabha seats, Jagan now has an unenviable task of not only putting the economy on track but also fulfilling a string of populist promises he has made to the people that involve huge cash dole-outs.

“If the NDA government’s actions are good for people, we will support even though they don’t require our numbers,” he told a meeting of the newly-elected MPs recently, indicating the nature of his future engagement with the Centre.

Moreover, he cannot afford to antagonise the BJP leadership with the illegal assets case still hanging over his head. Jagan’s political survival will largely depend on how deftly he manages his equation with the Centre in the days ahead.