The politics behind TDP’s pull out and Modi government’s denial of what Naidu wants

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Chandrababu Naidu is all set to break up its alliance with BJP and bid adieu to Narendra Modi. He blamed the centre for backing out of all that was promised to him. He accused Modi government of not giving enough financial assistance after the partion of Andhra Pradesh. The state had suffered a huge financial loss due to carving out of Telangana.in 2014. Since then the state is fighting to compensate for the loss.
The two TDP ministers in the central government are Civil Aviation Minister Ashok Gajapathi Raju and Minister of State for Science and Technology YS Chowdary had resigned from their post. Two ministers of BJP have left the Andhra state cabinet too.

Here is the summary of the crisis between the TDP and the Modi government-

What the TDP wants:

Andhra Pradesh Chief Minister Chandrababu Naidu has accused the Central government of not compensating the state adequately after Telangana was carved out of it in 2014. Andhra Pradesh did suffer financially from the bifurcation and the AP Reorganisation Act, 2014, did promise a special-category status to Andhra Pradesh. The status means the Centre and state finance the Centrally sponsored schemes in the ratio of 90:10 instead of 60:40 as is the case with other states.

Why Modi government denies it:

The Central government says it can’t give the special category status to Andhra even if it wants to. Why? Because the 14th Finance Commission, which decided how the Centre and states share finances, restricted the provision of special category to only the north-eastern and three hilly states. Yesterday, Finance Minister Arun Jaitley said he was bound by the constitution.

Has the Centre estranged Andhra Pradesh?:
This is not true. Finance minister Arun Jaitley agrees that Andhra needs special economic assitance after the bifurcation. He has offered financial assitance equivalent to what a state gets from a special-category status—the 90:10 funding of central schemes in the state— through other means like external agencies. Naidu wants the funds throgh Nabard which Jaitley says would add to fiscal deficit unless it’s through creation of a special purpose vehicle (SPV). Jaitley said he had yet to hear from Andhra Pradesh on this proposal. Jaitley also said the Centre had already paid Rs 4,000 crore to Andhra for the revenue deficit due to the bifurcation of the state, and only Rs 139 crore remained to be paid on that count.
Why TDP is not coming around:
After Hyderabad went to Telangana, Andhra Pradesh started buidling a new capital, Amaravati, which requires huge funds of Rs 58,000 crore. The Centre has given Rs 2,500 crore had already been given by the Centre but it seems to be too little for Chandrababu Naidu’s dream project Amaravati The Polavaram irrigation project, which has to be inaugurated in 2019, too requires huge funding. While the Centre has given Rs 4,660 crore for it, Naidu wants the Centre to bear the entire cost, nearly Rs 58,000 crore, including that of rehabilitation of those displaced by the dam.
What is the real cause of this tussle:

The election for state assembly will be held next year and Chandrababu naidu wants to turn it as an emotional issue of discrimination against the people of Andhra Pradesh. According to some political experts he also see political benefits in third front and wants to search posibilities to establish a new political option

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