Saturday, May 5, 2018

15th Finance Commission should not be viewed as Southern vs Northern States

The following has been written for MyInd Makers. Pasting it here for reference:

Last week, the Finance Ministers of Karnataka, Kerala and Andhra Pradesh, along with the Chief Minister of Puducherry met. The purpose of the meeting was apparently to highlight how the “South Indian” states are going to lose a lot of money because of the terms of reference of the 15th Finance Commission (FC).
The entire English media went berserk on this “South Indian” conference. They didn’t tell you that Telangana and Tamil Nadu did not send their representatives to this meeting. Have you seen a single article, anywhere in the English media, trying to analyse why only 3 out of the 5 southern states were part of this meeting?
Kerala is ruled by the Communists, Karnataka and Puducherry by the Congress, and AP by TDP which has been going hammer and tongs against Modi. Not a single article that talks about the political color of this meeting! Come to think of it, Telangana and Tamil Nadu are also ruled by parties that are *not part* of the ruling coalition at the center. What then explains this skewed representation?
What was the purpose of the meeting? Political parties ruling these states make this claim that they are exceptionally performing states and are at a great disadvantage if the 15th FC is asked to consider 2011 census as their basis for tax devolution. The claims are based on ill-informed articles in the English media, because the terms of reference of the 15th FC make it absolutely clear that performing states will be incentivized. These lies have been highlighted in an earlier article here.
However, this has not stopped the media from continuing to spread mis-information on the 15th FC. Caught lying on the performance based parameters, they have now picked up on the “constitutional propriety” of some of the terms! Let’s take, for example, the lead article in The Hindu couple of days back.
The author of the article is a member of the 14th FC. And makes some really contradicting arguments.
·        “..from the perspective of economic objectives, there is no justification in using 1971 population data as a factor in the horizontal distribution of funds.”
·        “The ToR for the present Commission (15th FC) could have been silent on which population figures should be used and avoided a controversy
There is no justification, but the solution to a perfectly justified change is being silent? I am perplexed at this kind of recommendation coming from a member of the 14th FC! Modi government is perhaps the first government that is being castigated for doing the right thing! We move on to the next big point of contention according to this article:
·        Never before in the history of the country has a Finance Commission been asked to review the recommendations of the previous Commission on the grounds that it gave “substantially enhanced devolution”.
What exactly is the problem here? If the criteria of “never before” has to be applied for everything that we want to do, how can we even see any progress? Since the author is a member of the 14th FC, should we also then point out that “never before” has any FC proposed a 10% increase in the funds that state will get? Should they not have stopped from making such a recommendation then?
The rhetoric continues, with the following argument:
·        Asking the Commission to take into account the performances in implementation of various Central schemes is equally contentious
Why does he find this contentious? No concrete answers are given for this question – just some rhetoric on fiscal federal fabric, etc!
Just couple of days earlier, The Hindu had an editorial  that screamed a strong headline – “Divided we Fall”! It doesn’t mention who is creating this divide. Substantial space is dedicated to the PM’s clarification to this controversy, and not to actually who and how this all started. Just one line – “ but framing the issue as a southern vs northern States debate is not constructive. 
Did the ecosystem realize that this is not constructive because their lies were called out? Did they suddenly realise that if they are infact performing states, then they will be actually incentivized? And therefore, now are falling back to other frivolous arguments, like the following
And the Centre’s attempt to increase its share from the divisible pool of resources from the present 58% is something that should concern all States, whether populous or not.
Here is the Gazette Notification. Here is an open challenge to The Hindu to point out where exactly is the centre making this attempt?! Amongst other things that the the 15th FC is tasked to consider, it has to also take the following into consideration.
The impact on the fiscal situation of the Union Government of substantially enhanced tax devolution to States following recommendations of the 14th Finance Commission
I simply fail to understand the controversy and interpretations around this. There has been a huge increase in the devolution to the states, and it will obviously impact the centre’s finances. What exactly is wrong in studying that impact? If we go by how our media wants to generate controversies, then the central government should merely keep quiet on anything it wants to study!
Another editorial in Business Standard made the exact same points on April 12th. Picked up again by The Hindu’s editorial desk on April 14th. And further propagated in an op-ed article on April 16th! If there is anything we have to learn from this controversy, it is the amazing cohesion with which the ecosystem functions. A lie started by The Wire, led to a meeting of Finance Ministers of 3 states and CM of a UT. With the lie now busted, the ecosystem has moved on to the next lie, as if the first one didn’t even occur!
Amidst all this, it was very disappointing to see the centre’s lethargic response to this. Especially, when they have themselves drafted a very good ToR for the 15th FC.

We have had a good laugh and enough fun at Rahul Gandhi’s expense, but it is now time that we question his incoherence and ignorance

The following article was written for MyInd Makers. Pasting it here for reference:

In almost every Indian school that we study in, the story of Gandhi’s three monkeys is drilled into our minds. “See no evil, hear no evil, Speak no evil”. Ask any school going kid, and he/she will tell you this without ever needing to refer to their notes.
If you were to write a speech for a political leader and ask him/her to refer to this story, it should suffice that you write – “Refer to Gandhi’s three monkeys”. In 2015, Rahul Gandhi gave a speech in the Lok Sabha. He referred to his speech and read out “Bura mat dekho”. He then said, “The second monkey used to say” and then sees his notes again and reads out “Bura mat suno”. And repeats this sequence for “Bura mat bolo”.
Don’t believe me? In this speech here, please refer from 0:56 onwards, and notice how he had to refer to his notes to even read out the simplest of lines, that almost every school going kid in India is familiar with. His speech sheet went viral then too – notice how the monkey quotes are written in red ink too.
Why am I bringing out an old 2015 video today? Because that incident is not an isolated one. His non-serious preparation into serious political and policy related speeches are such an embarrassment and need to be highlighted at every possible instance. Rahul Gandhi’s recent gaffes during Karnataka elections have created significant news on the social media and the regional media but hardly created a ripple in the English media. This would have been fine, if Amit Shah’s recent gaffe referring to Yeddyurappa instead of Siddaramaiah, didn’t go viral. The entire hierarchy of Congress, beginning with Rahul Gandhi shared it on his twitter account, and the English media happily lapped it up, to create an equal-equal debate between Amit Shah and Rahul Gandhi.
Rahul Gandhi’s first gaffe (in Karnataka) was when he made a vain attempt to quote the great Kannada poet – Shri Basavanna. Rahul begins with “Basa… Basavaji ne kaha tha”. And goes on to recite a poem that took people a while to understand what was going on. However, the most shocking of his gaffes came when he failed miserably to even pronounce, Bharat Ratna, Shri M. Visvesvaraya’s name. Take a look at this video to see how he struggles and makes no attempts to even apologize for this gaffe.
If an Amit Shah or a Narendra Modi or a Yogi Adityanath committed this gaffe, the entire hierarchy of Congress and the English media would have gone to town, on how this is an insult to the Kannadigas and how  BJP is imposing Hindi everywhere.
Rahul Gandhi’s gaffes are therefore not an exception. They are a rule. The gaffes aren’t limited to mere pronunciation errors. They extend to even comprehension problems. Rahul Gandhi has even equated every person with the surname Modi to be corrupt. He has told us that for every single selfie you take, a person in China gets a job! Yep, he really did that, *and* he has been seen taking selfies ever since, after that statement!
Earlier, the answer to any question was “Women Empowerment”. These days, the answer to any question is “Demonetization and GST”. Is this what we really want to hear? Is this what the English media and the ecosystem is trying to thrust on us? Is it not time for us to take a step back and realize that behind all those memes and videos mocking him as Pappu, lies a dark reality – that he is the President of the Congress party; that he has near no clue on any of the topics he is asked to speak about ; that this strategy of imposing his raw thoughts on this nation is actually dangerous to the nation; and that he might get to a position where he will decide upon the future course of policy of our country. 
I kept on wondering – if Amit Shah’s gaffe is news everywhere, then why is Sonia Gandhi’s “Rajineeti ki balatkaar” not significant news to be covered? If Amit Shah’s gaffe is news everywhere, then why is Rahul Gandhi’s Vish…raya gaffe not news anywhere? If every single mannerism of the President of the BJP is news everywhere, then why is the same yardstick not applied to the President of the Congress?
We’ve had a good laugh and enough fun at Rahul Gandhi’s expense, but it is now time that we take his incoherence seriously. It is now time we seriously hold Rahul Gandhi responsible for his irresponsibility.

When Amit Shah wrote a letter to Chandrababu Naidu and he replied via a 2 hour speech

The following article was written for MyInd Makers. Pasting it here for reference:

On March 23rd, 2018, BJP President Amit Shah wrote a 9 page letter to TDP President and CM of AP, Chandrababu Naidu. On the next day, Chandrababu Naidu gave a 2 hour speech in the Legislative Assembly, most part of which was dedicated to countering the contents of the 9 page letter.
The aim of this article is to not go into every single detail, but to give a broad overview of certain aspects that need to be highlighted.
The controversy regarding Utilization Certificates (UC).
In recent times, BJP mentioned about the non-submission of UCs by the government of AP for the funds released by the central government. TDP, at first tried to counter by saying all these are available online, and BJP is attacking the people of AP and not just the government of AP.
So far, the center has released 2500 crores for the capital region of AP. 1500 crores were released for Amaravati, and 1000 crores for Vijayawada & Guntur (which fall under the capital region).  Amit Shah, in his letter, claimed that the state government has spent only 8% of Rs. 1000 crores released by MoHUA for the capital city. Chandrababu Naidu in his speech (At 1:34:30 in this video),  mentioned that ~36% of UCs were submitted for money released to Guntur, and 8% for money released to Vijayawada – on an average, 22% of UCs were submitted for the 1000 crore released. So whilst we can continue to debate on the quantum of UCs, it does remain a fact that UCs for the full amount released were not submitted yet.
Chandrababu read out details of a letter from NITI AAYOG, that said the UCs submitted for 1500 crores released towards Amaravati are in proper order, and recommended a further release of 1000 crores (which haven’t been released). However, it is pertinent to note that Amit Shah hasn’t questioned CBN on these 1500 crores yet.
Amit Shah has also claimed that only 12% of 1050 crores released by the central government for backward areas have been utilized. Chandrababu Naidu first told us that central government gave only 350 crores for 7 backward districts, and they immediately took it back, citing that PMO didn’t approve the amount yet! The claim sounded surprising, because I am not sure how we can get back money into our account, once we transfer it out!
After Amit Shah’s letter came out, Chandrababu Naidu clarified in his speech that UCs for 946 crores out of 1050 crores have been submitted. However, here is the catch. The amounts were released from FY 2014-2015 onwards (yearly 350 crores), but the UCs were submitted in FY 2017-2018!
Does this mean that Amit Shah is technically right in asking that funds were in fact not utilized in the FY 2016-2017?
And even to these UCs, there were some queries that came back from NITI AAYOG, and the state government responded back. Whilst this process was on, CBN claims that an additional 350 crores was transferred by Finance ministry, but taken back the next day because the PMO didn’t approve! Assuming this to be the correct story, what exactly is wrong in what the PMO did?
Chandrababu Naidu has been very successful in selling this 350 crores being taken back story. It was only after Amit Shah’s letter came that most people even came to know that 1050 crores were released for the development of backward districts!
The controversy regarding Educational Institutes.
In the AP reorganization Act, 11 educational institutes were promised. Amit Shah mentioned that 9 institutes have already been sanctioned and have begun operations too. Amit Shah doesn’t mention these are in temporary campuses, perhaps because it is norm for them to function in temp campuses until such time permanent campuses are built.
Chandrababu Naidu is telling us that only ~576 crores have been released for these 9 institutes, and a total of 11,000 crores is needed for setting up these institutes in permanent campuses. There have been some claims that the state government has not yet finished land acquisition. For example, the land for IIM Vizag, was only handed over last month. Chandrababu Naidu, in his long assembly speech, also told that nearly 550 acres of land has been given for IIT Tirupati, for which only 100 crores have been released so far. He is claiming that the center is not doing any favors because all land acquisition is by the state government only. But he hasn’t gone into the details of all these 9 institutes. So, we are back to the original argument – there has been good progress on the educational institutions, but the sparring is now about when will permanent campuses get ready!
The controversy regarding Infrastructure projects.
In his letter, Amit Shah has written about the detailed status of each and every project mentioned in the AP Reorg Act. For every progress shown, either Chandrababu Naidu is saying that centre is not doing any favour or saying that enough money is not given! He has skipped reference to most of these projects, but instead employed a lot of rhetoric.
For example, when Amit Shah mentioned about the development of three airports (Vijayawada, Visakhapatnam, Tirupati), CBN claims all land was given by him so what is the favour that the centre has done? Similar logic is employed when referring to the multiple rail and road projects that Amit Shah mentioned. Going by CBN’s response, it looks like these infrastructure projects are a reality and with nothing to counter upon, the rhetoric of “So what if the center did it? It’s their duty, they can’t claim credit” is constantly being employed!
Is anyone absolutely right or absolutely wrong, in this whole saga?
In consonance with what I have been saying all along – it is wrong to say that the center didn’t do anything for AP. Amit Shah’s letter and CBN’s response is proof enough of that. However, it is absolutely right in saying that the center has either ignored or significantly delayed some key promises, that has led to this breakup of the alliance. CBN, in his marathon speech, even claimed that whatever 2,00,000 crores additional funds they got was due to Finance Commission recommendations, and they are no special favours to the state of AP. He has cited the various incentives provided to the North Eastern states periodically (through cabinet decision), and questioned why AP is not being given any of those incentives. Solely based on what was promised, CBN is well placed to ask this question – and it is this query that the BJP has not been able to counter properly.
In his speech, CBN also claims that AP has the best GSDP and has been consistently ranked Number 1 in “Ease of business rankings”. The most obvious question that comes to mind is this – why then do they need any more special assistance? Answer is simple – because it was promised.
CBN has tried to portray Amit Shah’s letter as an insult to the people of AP, and has made some unsavory remarks on how the state sends funds to center and the center then decides how to split it – but that argument is for another day

Chaos over Amaravati – Why is yet to be built new Andhra Capital already mired in Controversies?

The following article was written for MyInd Makers. Pasting it here for reference. 

Ever since the TDP pulled out of the government and subsequently the NDA, a controversy has been raging on multiple fronts. My previous articles sought to give you details on a couple of topics. This article seeks to explain the (surprising) controversy around the construction of the capital city, Amaravati. 
In 2016, when Chandrababu Naidu shifted the secretariat from Hyderabad to Amaravati, here is a snippet from an article published in MyIndMakers.
“Nearly 5000 employees will be moving from the comforts of Hyderabad to the unknown confines of Amaravati.  From a no capital city in 2014, to acquiring more than 33,000 acres, to publishing master plans for the city,  to building a temporary complex for Secretariat in 2016 – is by no means a small achievement! The government needs to be congratulated for this.”
At that point of time, one of the biggest achievement of the TDP-BJP government was that a whopping 33,000 acres of land was acquired, through a unique land-pooling process. Detailed master plans were ready, and also the construction firm Maki and associates from Japan were tasked with constructing the key buildings like Assembly, Secretariat, High Court etc.
However, things didn’t work out as expected with Maki and associates, and their contract was cancelled. And the entire design phase opened yet again! This time, Foster+Partners, a UK based firm was given the contract. All through the year 2017, the designs underwent multiple discussions and changes (nothing surprising, given the importance of the buildings!). Chandrababu Naidu even roped in Bahubali’s director S.S.Rajamouli to help with the creative aspects of the design. A controversy erupted over it, but I think the controversy was silly – because Rajamouli was bought in only to give suggestions and not do the actual design.
During this time, the opposition kept on asking - why is it taking so long to finalize the designs? Again, I found it quite silly. If we are designing our own home, we would like to ensure that we are absolutely in love with that design. Here we are talking about the key buildings of a new capital city! A “delay” of about one year is quite understandable, and shouldn’t have been made into an issue.
We now come to the present. At the beginning of the article, I mentioned about “(surprising) controversy”. Once TDP pulled out of the NDA, they went to town saying that the Central government did not give enough money to Amaravati. The first question that will pop into your mind – Why should the central government award any money to Amaravati? Simple answer – because the AP reorg act says so:
“The Central Government shall provide special financial support for the creation of essential facilities in the new capital of the successor State of Andhra Pradesh including the Raj Bhawan, High Court, Government Secretariat, Legislative Assembly, Legislative Council, and such other essential infrastructure.”
Why did the central government have to include this in the act? Because AP was being bifurcated, and the successor state of AP will be losing Hyderabad. They wanted an assurance on building of a new capital and the Congress party found a way out – include this in the reorg bill.
The central government has so far released INR 2,500 crores for the capital city of Amaravati. TDP is now claiming this amount is insufficient to carry out any meaningful work. And here is where I found the argument very surprising. The designs for the High Court, Secretariat, Assembly etc were finalized a couple of months ago only! When there were no designs ready in the first place, how can the state government claim that not enough money was given? TDP is trying to explain that a Capital city merely doesn’t mean these buildings. The larger point may be fair, but the act clearly mentions these buildings and the design of the buildings were not even ready till recently!
TDP is also claiming that 1000 crores out of the 2500 crores was actually meant for drainage projects in Vijayawada and Guntur, and therefore shouldn’t count as money given for Amaravati. However, the AP government created a “Capital Region Development Authority” , in which the Capital region encompasses Amaravati, Vijayawada, Guntur, Tenali and Mangalagiri! So there is Amaravati, the Capital City (~130, and then there is the Capital region (~7000! And that is why I find this controversy created by the TDP (and the telugu media) to be extremely surprising!
Yet another surprising aspect is that the opposition parties are trying to question the need for building a World Class capital city. This quintessential Congressional attitude of trying to always remain second grade to someone else is why we don’t boast of any world class cities. The building of Amaravati is a brilliant opportunity that has opened up. At various instances both the center and the state governments have committed themselves to build such a city. It is extremely unfortunate that the TDP sought to make an issue out of this, when they had genuine grouses to talk about.
Amaravati should be built in such a way that future generations will feel proud about it, and not view it as a missed opportunity. Creating of unnecessary controversies isn’t going to help in making us feel proud about it.

Congress led by Rahul Gandhi has a vision for India- Pushing India back to the Stone Age.

The following article was written for MyInd Makers. Pasting it here for reference.

he recently concluded Congress plenary in New Delhi has attracted a lot of criticism, because nothing concrete was proposed in terms of what the vision of the Congress party is, for the future. I think that criticism is entirely unfounded. The Congress party has given us crystal clear clarity on their vision. Let’s look at why the criticism is unfounded.
The Congress party has just told us that their victories in 2004 and 2009 are suspect. Think about it this way - Do they doubt this, because they know that EVMs can be manipulated? What is the solution proposed by the election commission, for the “apprehensions” of the Congress party? The new EVMs will print out a “receipt”, that shows which party you voted for. For anyone with a common sense, this should resolve any doubts that you have with EVMs.
But not for a party that takes pride in telling us that they bought computers to India. They now have this contrasting new vision that wants us go back to the paper age. This clearly shows us how willing they are to take credit for driving India to both ends of the spectrum! And their magnanimity in telling the people of India that their 2004 and 2009 victories are suspect, needs to be applauded to no end!
Apparently, “The economic resolution promised an end to tax terrorism”. And they gave some details on how they will do this too. 
For a party that introduced Education Cess; for a party that increased ST/VAT from ~4% in 2004 to ~12 % in 2014; for a party that introduced retrospective taxes – it was indeed a bit rich that they spoke about “Tax Terrorism”. Many twitter users pointed out that  with available data, that anyone earning more than INR 66,000/- per month, will fall into top 1%! So, brace up fellow Indians for more taxes, and a complete full stop to “Tax Terrorism”.
Elsewhere, Rahul Gandhi has already said he will change GST rate to one slab only, and will cap it to 18%! Today, more than 80% of items are taxed in the 5% and 12% slab. Is Rahul Gandhi proposing to end Tx terrorism by increasing the 5% slab or decreasing the 12 % slab, or better yet – bring everything on par to 18%? Or am I asking for too much clarity?
The Hindu editorial was very disappointed with how the entire plenary went, but their description of the economic resolution was as confusing as the resolution itself! “The party’s economic resolution faintly echoed Karl Marx’s eleventh thesis on Feuerbach”. Raise hands, all of you, who have ever heard about “Karl Marx’s eleventh thesis on Feuerbach”!
What is the solution to the corruption perpetrated during the Congress regime? Let’s tar all those with the surname Modi. This mind-blowing genius statement can come only from the Congress President. No one else is even capable of such an analysis.
Various news organizations saw this amazing clarity as a new “aggressive Rahul”. All Modis must now start fearing for their future!
While celebrating the moral victory of Rahul Gandhi in the Gujarat Assembly elections, the English media went berserk. Here is a sample:
While democracy was developing elsewhere, Rahul Gandhi’s own party was singing a different tune. He himself was elected without any election, but that’s a given. Now, Rahul Gandhi has been authorized to choose the all-important members of the Congress Working Committee.
Overall, the Congress plenary session has accomplished what it set out to do. It sought to glorify the first family, which it did relentlessly. As expected, they ignored their Prime Minister’s outside of their family. P. Chidambaram credited Rajiv Gandhi for reforms that were carried out after he died.

Rahul Gandhi has criticized Manmohan Singh for not living up to people’s expectations. Rahul Gandhi repeated what he has been saying from many years, yet the English media sought to highlight a “aggressive Rahul”.
Keeping all this in mind, may Congress continue to achieve many more moral victories. For the good of India. For the glory of India!
PS: Typically, I wouldn’t rely just on media reports, and listen to actual speeches. But pardon me this time, it has become increasingly difficult to listen to Rahul’s speeches!

Tuesday, March 20, 2018

Is it true that Modi Government has been unfair to Andhra Pradesh as alleged by TDP and other Telugu Parties?

The following article was written for MyInd Makers. Pasting it here for reference:

Ever since the political crisis in the NDA broke out, numbers are flying out fast and thick. Every political party that has a stake in AP is coming out with its own version of numbers – how much was given to the state, how much was received by the state, how much was spent by the state etc. There is no uniformity amongst these numbers, but the underlying sentiment still prevails – the Central government has not stood up to its promises. However, the state government is not squeaky clean when it comes to certain claims. Let’s take some time to understand these controversies related to the following:
  • Tax devolution
  • Revenue Deficit
  • Railway Zone

In February 2015, the central government announced that they are accepting the recommendations of the 14th Finance Commission, and because of this, the states will now get 42% share of the central taxes instead of the 32% they got earlier. This whopping 10% increase was unprecedented and was generally well received too.
In addition to this, the central government has also agreed to compensate for the revenue deficit of a few states for the period 2015 to 2020. As part of both decisions, Andhra Pradesh was to get the following – A whopping INR 1,78,000 crores over a period of 5 years starting 2015, and an additional INR 22,000 crores for the bridging the revenue gap. That would amount to a total of 2,00,000 crore!
Tweeting at that time, I felt this was a master stroke by the central government – without having to give a special status, the central government had solved the problem of revenue deficit of AP and they get an additional 1,78,000 crores. But my assessment was short-lived, and massively backfired too! Please allow me to explain this through a couple of snapshots.
This is how the largest circulated telugu newspaper covered the allocation, in its Hyderabad edition.
The banner headline highlights the 10% extra money that will come through devolution. There is a chart that shows the revenue deficit of different states. And on the same page, we are told that Telangana will get 1 lakh crores for the next five years.
How was the AP news covered then? Because this was in Hyderabad edition, the news was covered in the inside page, prominently, like this:
The headline highlights the Rs 22,000 crore benefit from revenue deficit only. Only one of the bylines tells us about the whopping Rs. 1,78,000 crores that AP will additionally get! And then there was another headline that says AP actually asked for more than 1 lakh crores. Do you notice the anomaly? Whilst 1,78,000 crore is a small byline, the key headlines are that AP asked for  more than 1 lakh crore but got 22,000 crore only!
This is when we understood that the sentiment in AP is very strong for a special status. It does not matter if AP get 2,00,000 crores additionally, because all other states are also getting benefitted from the additional 10% devolution! It is this sentiment that the BJP has failed to read. The TDP-BJP combine failed to communicate to the people the benefit of these 2,00,000 crores!
The second issue is regarding revenue deficit. Here is how the whole thing is being played out. First, let’s see this graphic that shows the Central government side of the story.

The center’s claim is that out of the promised 22,113 crore, about 15,500 crores have already been released. Then you might be wondering what is the problem? The revenue deficit grant is being given from the year 2015-2016. The big bone of contention is the revenue deficit grant of the year 2014-2015, the year in which the state was formed!
AP is claiming that the revenue deficit for that year alone is 16,000 crores! They are also citing a CAG report to bolster their stand (Quite strangely, though I have been able to easily find the CAG report for 2015-2016, unable to find a similar report for 2014-2015. Any help will be appreciated ). However, news reports have claimed that there is another CAG report that says that this 16,000 crores is an overestimate, and the real deficit is ~7000 crores. There is a contention therefore between the center and the state on this amount. So far, about 3900 crores were released by the center for the year 2014-2015. Arun Jaitley has proposed (from ~8:00 here) two formulae – if you use one, then the remaining amount due is only 138 crores. If you use the second, then the remaining amount due is about 1600 crores. And he is saying that the center is willing to give the 1600 crores.
Head spinning with all these numbers? Don’t worry, you are not alone! And here is where the political messaging also comes into picture. It is pertinent to note that so much number crunching is not possible to be drilled down to the public! The TDP is succeeding in telling people that the central government is claiming that the revenue deficit is only 138 crores! That they are asking Rs.16,000 crores, and Modi is saying Rs.138 crores! No mention about the other 1000s of crores released – the messaging is that the central government is claiming a meagre amount of 138 crores only is due.
The other emotive issue on which the central government has failed is the railway zone to Vizag. Technically, the AP Reorg act says that only a feasibility study will be done by the Indian Railways within 6 months of the formation of the state. Till date, no such study has been released. A couple of days back, Indian Express published an article:
There are two problems here. One arises if we are to assume the contents of this news report are true. The report states:
 “…the demand for a new zone to benefit a particular state “vitiates the pan-national character of the Indian Railways” and goes against the idea of the “forefathers of the nation”
Is it a new trend to use this kind of a language? A new zone will go against the idea of “forefathers”?! A new zone will be catastrophic? Really, catastrophic?!
 “Any further fragmentation of Railways will be like putting many nails in the coffin of the Indian Railways as there is no need for any new zone, operationally or administratively.”
Many nails in the coffin of the Indian Railways? Does a demand for a new zone deserve such strong language? The news report also tells us that about 50 demands are pending for 12 new railway zones. If the report is true, then this report does one thing for sure – “puts many nails in the coffin” of the BJP in AP!
The second problem is this – if the contents of this report are untrue, then why haven’t we heard any rebuttals from the Railways or even the Minister himself? Either way, the messaging on the railway zone has been really poor. Telugu media has recently highlighted that an official in the central government has announced that a railway zone is impossible. Chandrababu used the floor of the Assembly to highlight this as an insult to the people of AP – he has directly asked why can’t the center differentiate between a political decision and an administrative one!
One must understand that a railway zone to Vizag was shown as a big relief to AP, and therefore became an emotive issue, once the center started dilly dallying on this. At the risk of repeating myself to the point of boredom, the issue in Andhra Pradesh is now political, not bureaucratic.

When Leftist Media created a fictional divide between South India and Union of India

The following article was written for MyInd Makers. Pasting it here for reference:

As the anger against the central government was rising in AP, an articleappeared on the controversial leftist website, The Wire in February, 2018. This article was trying to analyze just one term of reference, of the 15thFinance Commission (that will come into effect for the years 2020 – 2025), and came up with an atrocious byline – “It is becoming almost untenable for Tamil Nadu and Kerala to thrive in the Indian union as rational, self-interested sub-units.”
Popular Telegu actor, and Jana Sena party chief plugged this article and added his opinion as follows:
Is the success of south Indian states going to be used against them by Union of India??? This article flags a genuine concern that population-based formula for sharing tax revenues between states & Center would hurt south Indian states.”
This argument started gaining slow traction. TDP MP Mr. Murali Mohan made a statement that 5 south Indian states wouldn’t mind separating from the country too. This has created enough outrage on Social media, but the source of this outrage wasn’t too well known then. News reports have also mentioned that Chandrababu Naidu made an argument that South Indian states are being penalized, in his 2 hour 20 minute speech in the state Assembly. I haven’t heard the speech yet, so I have no way of verifying it. TRP-centric TV media even ran programs that discussed “Pawan Kalyan & Kamal Haasan to end South India's slavery?
On Sunday, March 11thEenadu, the largest circulated telugu newspaper (And 9th largest circulated in the country), put this argument on the front page. They interviewed Shri V. Bhaskar, secretary to the 13th Finance Commission. The headline screamed – “Damage to the spirit of Federalism”. Below is a snapshot of their coverage on this issue.  

What is the crux of the argument these folks are making?
  • The terms of reference of the 15th Finance Commission (FC) tell us that “The Commission shall use the population data of 2011 while making its recommendations.”
  • The Wire, and subsequent experts have argued that this is grossly unfair because this basically means all those states that have made progress on controlling population and increasing tax productivity will be at a loss.
  • By the same logic, states that have not bothered about implementing these measures will immensely gain.

The article in Wire claims that Tamil Nadu and Kerala are at a massive loss because of this. The article in Eenadu tells us that AP, TN, Kerala, West Bengal, Odisha and 7 other states stand to “lose” money, whilst UP, Bihar, Rajasthan, Madhya Pradesh, J&K and the remaining states stand to “gain” money.
While reading the article in Eenadu, I was perplexed when Shri Bhaskar made the following statement:
From the 7th FC to the 14th FC, all of them used the 1971 census data as reference”.
This is reconfirmed when we visit the Finance Commission website and look at the terms of reference of all the finance commissions. Up until the 6thfinance commission, no specific guideline was given on which census data to be used. From the 7th FC (set up in 1977) onwards till the 14th FC (2015 to 2020), every single FC used 1971 data! Imagine using 1971 data for distribution model in 2015 – what explains this status quo for so many years? Isn’t it surprising that we used 1971 census data even 40 years later?
The issue of Tiny Fonts.
The Wire says that the change of criteria from 1971 to 2011 census “was done with such little fanfare and in fonts so tiny that it made one wonder if those who sought it wanted no one to take notice.
Fonts so tiny? Such little fanfare? Please take a look at the Gazette notification. The font is the same across the entire document! The population criteria is placed at a similar place, as was done in all previous FC references. I, for one, fail to understand this penchant to dramatize non-existing problems?
Was any weightage given to 2011 census in 14th FC?
The Wire tells us that “… the 14th Finance Commission…. gave a weightage of 10% for Census 2011 data”. So is it fair enough to assume that the remaining 90% weightage was from the Census 1971 data?
Shri V. Bhaskar, Secretary of 13th Finance Commission told in his interview - “The 14th FC gave 17.5% weightage to the Census 1971 data”.
At first look, these numbers itself were very perplexing! Because the automatic assumption is that the remaining percentage is from the other census. It turns out that my assumption is wrong. The devolution formula has always included other aspects, outside of population. For example, this table picked up from a government website confirms such findings for 13thand 14th FC
What about the other key argument – should performing states be penalized?
Both the articles in The Wire and in Eenadu have suggested that the performing states of South India are at a heavy loss. In fact the eenadu article even gave us the losses that the performing states would have entailed, if the 2011 census was considered for the 14th FC (whose period is 2015 – 2020). The table told us that AP would have lost ~24,000 crores, TN ~22,000 crores, Kerala and WB ~20,000 crores each and so on. It also told us that UP would have gained ~35000 crores, Bihar ~32000 crores etc.
And here’s where the chicanery of websites of The Wire, and the insincerity of bureaucrats (covered in Eenadu) come to the fore. Since most readers don’t bother to go and actually check the terms of 15th FC, they will automatically believe that there is no provision for rewarding the performing states.
Here is the truth. For the first time ever, the terms of reference for a finance commission included a number of “proposing measurable performance-based incentives for States”. A few earlier commissions considered fiscal discipline for incentives, but never has an entire section been dedicated to this.
There are a total of 9 parameters under which it has been recommended that performance can be measured. Previous FC’s for sure did not have so many parameters explicitly mentioned. The second parameter recommended is “Efforts and Progress made in moving towards replacement rate of population growth”.
The Wire article told us that – “Some experts have argued that having a weightage factor for dropping fertility rates is a possibility.” Possibility? They have been mandated to consider dropping fertility rates!  
In his interview, Shri V. Bhaskar has told us that a good “Replacement Fertility rate” should be less than 2.1. And there are many states that are currently higher than this. The terms of reference clearly indicates that states that have moved towards this rate should be considered for incentives.
The entire premise of the North India – South India argument was based on a lie that states that have made progress in terms of containing their population will be heavily penalized. The truth is that they will in fact get incentivized!
Not just that, please take a look at other parameters too. States that have done good in GST, Ease of doing business, grants for local bodies, sanitation, waste management etc – will all get incentivized. This is the first time that such measurable parameters have been placed in the FC terms of reference. The 15th FC is currently accepting suggestions too - shouldn’t we be spending our time in giving these inputs to the FC?
What then explains the deliberate attempt to spread such lies and mis-information? What the Wire published got mainstreamed into the politics of a state in India. A lie travels far before the truth wakes up. It is one thing to cast aspersions on methodology of a commission, or give suggestions based on available information. It is a whole different ball game to arrive at dangerous conclusions based on half assumptions! A ball game that many sections of media are perfecting!