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Division and Dividends

The real reasons behind the BJP-TDP break-up

By kingshuk nag | 1 April 2018

In February 2014, months away from the Lok Sabha elections, the United Progressive Alliance government was desperate to see through the Andhra Pradesh Reorganisation Bill—which, if passed, would bifurcate the state of Andhra Pradesh. The bill had been the result of a fierce movement for creating Telangana that had lasted for decades. However, members of parliament from the Andhra region across parties had been protesting the bill tooth and nail—on 13 February, one Congress MP had unleashed pepper spray over the house.

On 18 February, when the UPA government had made all arrangements to pass the bill, and all eyes were on Lok Sabha Television, the screen went blank about three minutes into the proceedings. Speaker Meira Kumar decided to go ahead with a “voice vote”—where the speaker asks for the members’ consent to pass the bill and they respond with “aye” or “nay.” Even as members demanded a “division vote”—where members stand up at their seats—Kumar went through with the voice vote. Opposition leaders called the day the “death of democracy.” While the Lok Sabha secretariat claimed the blackout was a “technical glitch,” the BJP described it as a “tactical glitch.”

Since the new state of Telangana was to inherit the affluent capital city of Hyderabad, along with all its tax revenue, protests broke out in the residuary state of Andhra Pradesh. To assuage discontent among the Andhra voters, Manmohan Singh, the prime minister at the time, promised that for a period of five years the new state of Andhra Pradesh would be accorded Special Category Status—a classification given to geographically and socio-economically disadvantaged states that entitles them to extra funds from the centre. There were apprehensions that Andhra Pradesh might face severe financial problems, which the SCS might help alleviate. Then a BJP MP, Venkaiah Naidu (now vice president of India) asked that the SCS be given to AP for ten years, a demand that most parties in Andhra, including the Telugu Desam Party, or TDP, then backed. But soon after the BJP came to power it completely reversed its position. It now holds that the state should not be granted SCS at all.

In this context, it makes sense that the TDP, which was an ally in the BJP-headed National Democratic Alliance government for the past four years, has pulled out of the government over the demand. On 8 March 2018, two union ministers from the party tendered their resignations. However, there are other issues at play here.

While all parties involved have claimed that they have nothing but the best interests of the people of Andhra Pradesh at heart, it is clear that each has its own hidden agenda. With both the general and state-assembly elections due in 2019, battle lines are being drawn in Andhra. While the TDP attempts to shore up its waning popularity, the BJP seems to want to grow on its own in the state. Examining the history of the issue shows that the developments seemingly related to the SCS demand have more to do with each player’s political strategy ahead of the elections.

It is likely that politicians across party lines who supported the SCS grant to AP, including the TDP president and Andhra Pradesh chief minister Chandrababu Naidu, knew the grant would have been legally questionable. In the early 1970s, the third Finance Commission had cited many criteria for granting SCS to a state: economic backwardness, hilly terrain, low population density, location along national borders, and the non-viable nature of state finances. The states that have been conferred the SCS are the northeastern states Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura, and the northern states Jammu and Kashmir, Himachal Pradesh and Uttarakhand. All these states matched each of the criteria cited above. Andhra Pradesh, which only fit one of the mentioned criteria—economic backwardness—could not have been granted SCS under the Finance Commission’s provisions. Not only would that grant have invited legal challenge, economically backward states such as Bihar, Odisha, Uttar Pradesh and Rajasthan, among others, would have also made demands for SCS.

The AP Reorganisation Act passed by the UPA itself did not mention the SCS, but had provisioned that the “central government may having regard to resources available to the successor state of Andhra Pradesh make appropriate grants to ensure the adequate benefits and incentives in the form of a special development package are given to the backward areas of the state.” It also stated that central assistance would be given to AP to develop a new capital, a separate high court and port and irrigation projects such as the Polavaram Project.

Once Telangana was created ahead of the 2014 Lok Sabha elections, Naidu’s decision to partner with the BJP seemed driven more by convenience than ideological compatibility. Stories suggest that the day the bill to create Telangana was introduced in the Lok Sabha, Naidu tried to contact the BJP’s prime ministerial candidate Narendra Modi with an appeal to stall the issue. But Modi—whose resignation Naidu had called for after the 2002 Gujarat riots—was campaigning in Punjab that day and did not come on the telephone line. Sushma Swaraj, the leader of the BJP’s contingent in the Lok Sabha, expressed her inability to help given the party’s policy in favour of smaller states. In fact, the NDA government under Atal Bihari Vajpayee, in which Naidu’s TDP was an ally, had carved Chhattisgarh, Jharkhand and Uttarakhand out of Madhya Pradesh, Bihar and Uttar Pradesh respectively in the year 2000. It was the clout of Naidu with Vajpayee that had prevented the NDA government from even considering the demand for Telangana, which was older than those for the three new states created by the government.

Despite the BJP’s support for the creation of Telangana, Naidu tied up with the party as the BJP and Modi seemed likely to win the Lok Sabha elections. It made sense for Naidu to align with the BJP, as the party would have control at the centre, but was not a threat to the TDP in Andhra Pradesh.

A few months after the BJP came to power, in December 2014, the Finance Commission, formed to define the financial relations between the central and state governments, came out with its fourteenth report. The report recommended that the categorisation of states should be done away with and suggested that instead the resource gap in backward states should be covered by “tax devolution.” States such as Andhra Pradesh, which had a revenue deficit, could be given a revenue-deficit grant. Technically, however, the report of the Finance Commission is only recommendatory and not legally binding. If the union government was keen on giving the SCS to Andhra Pradesh, then, it could still retain the concept. The new BJP government opted against giving AP the status and the TDP did not protest.

In September 2016, the central government announced a “special package” for Andhra Pradesh. The minister for urban development at the time, Venkaiah Naidu, had announced that assistance worth Rs 2.25 lakh crore would be given to Andhra Pradesh in the form of various projects, some of which were already underway in the state under various ministries. Chandrababu Naidu hailed this decision, even though opposition leaders called it “two rotten laddus” and persisted with the SCS demand. Ironically, Naidu had said at the time that the opposition was misleading people by turning the SCS demand into an “emotional” issue. When asked whether he would end the alliance with the BJP if the need arose, Naidu had retorted: “Will resignations and backing out resolve the issue? We will continue to work closely with the Centre and see how best all the assurances made are honored.”

Even as the SCS became an emotional issue for the people of AP, Naidu understood that a liberal grant of money from the centre for his new capital made more sense. This was because, now deprived of Hyderabad, Naidu was looking towards building a grand and magnificent Amaravati spread across 30,000 acres. The SCS would have meant the centre would have paid 90 percent of the cost for centrally sponsored schemes, as opposed to 60 percent for ordinary states. Naidu, who has estimated a budget of Rs 50,000 crore for building Amaravati, has only got Rs 2,500 crore from the centre for that purpose, with a commitment of another Rs 1,000 crore. Naidu has said that this money suffices only to erect buildings but what is needed is a modern city with proper infrastructure. Amaravati is the only capital to be built in this century, Naidu has said, adding that its construction is a challenge as well as an opportunity.

The grant money for building was also attractive because Andhra Pradesh politics, across parties, has many contractors and businessmen-turned-politicians, including Y Sujana Chowdary—one of the former cabinet ministers whom Naidu pulled out of the government. The TDP MPs Murali Mohan Maganti and Rayapati Sambasiva Rao are examples. Mohan is a major builder, while Rao is involved in road construction. There are other MPs who are major transporters. The companies connected with these politicians stand to win huge contracts for constructions inside the capital. The larger the capital city proposed, the higher the number and value of contracts is likely to be.

It was only in 2017 that Naidu rediscovered sympathy for the SCS demand and subsequently decided to break ties with the BJP. The reasons for this are largely political. With the state elections and general elections approaching in 2019, Naidu has begun troubleshooting. A recent internal survey conducted by the TDP apparently showed a steep decline in the popularity of the party. While the survey showed no increase in the popularity of the YSR Congress Party and its leader Jagan Mohan Reddy, Naidu is worried. Reddy is on a statewide praja sankalpa padayatra; by the end of February, he had spent 100 days on the road, and is still continuing. His padayatra is reminiscent of the 1,450-kilometre padayatra undertaken by his father, YS Rajasekhara Reddy, in 2003. This increased the popularity of YSR manifold and brought him to power in 2004, ousting Naidu. Naidu is determined not to allow an encore. Deploying the SCS demand and turning against the union government were Naidu’s best bets to edge out Reddy and paint the BJP as the villain.

The BJP does not seem to be perturbed about the exit of Naidu, as it seems to have expected he would call it quits ahead of the elections. Although the TDP-BJP alliance in Andhra Pradesh is nearly two decades old, the main supporter of it in the saffron party was Venkaiah Naidu. With Venkaiah’s elevation to the post of vice president, and thus his exit from party politics, other sections in the party aver that the TDP’s exit is a promising opportunity for the BJP to build a new unit in Andhra Pradesh. While this may augur well for the long term, whether the BJP can ramp up its presence in the one year before the next election is questionable. A tacit alliance with Reddy’s YSR Congress could also be on cards. Meanwhile, the Congress vice president Rahul Gandhi also threw his hat into the ring, promising the SCS for the state if his party is elected to power.

With elections just around the corner, every political player in Andhra is selling a different version of the events. Feeling wronged since the bifurcation of the state, the electorate must now decide which version it is going to accept.

Kingshuk Nag was formerly an editor for the Times of India in Hyderabad and Ahmedabad. He is the author of seven books, including one on the Telangana agitations, and has written biographies of Narendra Modi, Atal Bihari Vajpayee and Netaji Subhas Chandra Bose. His latest book is on Vijay Mallya.

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