Hyderabad: In a first major setback to the month-old YS Jaganmohan Reddy government in Andhra Pradesh, the central government has categorically ruled out granting Special Category Status (SCS) to the state pointing out that it does not meet all the required criteria and many other states were also demanding the same treatment.

The reiteration of the earlier stand by Union Finance Minister Nirmala Sitharaman in Lok Sabha has come as a shocker to the YSR Congress party which was hoping to get a different treatment from the Modi government than what was meted out in the past to N Chandrababu Naidu.

Replying to a question Sitharaman said that the government had received the requests for SCS from several states including Odisha, Jharkhand, Rajasthan, Telangana and Chhattisgarh apart from Andhra Pradesh and Bihar. There was no proposal under consideration of the central government to grant SCS to any state, she added.

This could turn into a major embarrassment and political challenge for Jaganmohan Reddy who had based his entire campaign against Telugu Desam Party and Chandrababu Naidu on the issue of SCS and question their failure in securing the status from the centre.

Since leading his party to power in the state Jagan had dropped many hints that he was willing to work closely with Modi government at the centre and also extend support to it if the state was given SCS. He had also asked his party’s 22 MPs to exert pressure on the centre and work tirelessly to secure the demand.

At the same time after meeting Prime Minister Modi in New Delhi Jagan had admitted that it was not going to be easy as the BJP had secured an overwhelming majority in Parliament and did not need any support from his party.

Though at the time of the bifurcation of Andhra Pradesh, then Prime Minister Manmohan Singh had promised Special Category Status to truncated state to help it in overcoming difficult financial situation, and many top BJP leaders including M Venkaiah Naidu and Arun Jaitely were in the forefront in raising the demand for SCS, and even during 2014 election campaign Narendra Modi had also promised SCS to the state, after coming to power at the centre he and other BJP leaders went back and rejected the demand.

When the centre offered special financial package instead of SCS, Naidu initially accepted it only to wilt under the pressure from the same YSR Congress party and took a u-turn to demand SCS.

It became the trigger for the break-up of TDP-BJP alliance in March 2018.

Now the ball is in the court of Jaganmohan Reddy and it remains to be seen how he tackles the difficult issue.

Perhaps to soften the blow to Jagan, centre has accepted the other major demand of approving the revised cost estimate of Polavaram project of Rs550 billion (Dh29.05 billion). The demand made by the Chandrababu Naidu government had kept in cold storage by the centre arguing that the state had not submitted the utilisation certificates of the funds already released by the centre.