Facing threats from ally TDP, Finance Minister Arun Jaitley on Wednesday ruled out granting Special Category Status to Andhra Pradesh but said the government was ready to give monetary equivalent of the same in the form of a special package.

The Telugu Desam Party has threatened to quit the NDA alliance if the state is not granted the special status as was promised when the state was bifurcated in 2014.

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“Government is ready to give monetary equivalent of the special status to Andhra Pradesh. Instead of calling it special status, we’re calling it a special package,” Jaitley told media persons.

He said that while special status states as a concept did exist when Andhra Pradesh was bifurcated but after the implementation of the 14th Finance Commission recommendations the status was constitutionally restricted to the North-East and three hilly states.

Notwithstanding that, Jaitley said that since Andhra Pradesh “had suffered” after its bifurcation, it needed financial assistance which his government was committed to provide.

He said the state will get monetary equivalent of what they would be entitled to under the special status.

For Special Category States, the expenses for the centrally sponsored schemes are shared in the 90-10 ratio between the Central government and the state government as opposed to 60-40 ratio in case of other states.

Jaitley said the only facility that Special Category States now enjoyed was this 30 per cent advantage which could be calculated in monetary terms and given to the state.

The Finance Minister said that Andhra Pradesh earlier wanted those funds via externally aided programmes mechanism, but now wanted it to be routed through National Bank for Agriculture and Rural Development (Nabard).

“We’re open to that as well but a method has to be evolved wherein it doesn’t affect the fiscal deficit of either state or Centre,” he said.

Jaitley said the government had repeatedly said it was willing to give the monetary equivalent of the special status to the state and was waiting for the Andhra Pradesh government’s response.

Asked about meeting revenue-deficit of the state, the Finance Minister said the central government had already paid Rs 4,000 crore.

“Only Rs 138 crore is the balance.”