The move came just hours after Finance Minister Arun Jaitley ruled out the possibility of grant of Special Category Status (SCS) for the State.

Andhra Pradesh's Telugu Desam party pulled out its ministers from being part of the NDA cabinet late on Wednesday night, just a couple of hours after Finance Minister Arun Jaitley ruled out the possibility of grant of Special Category Status (SCS) for the State.

TDP Minister Ashok Gajapathi Raju and Minister of State Y.S. Chowdary will resign from the government on Thursday, TDP President and Andhra Pradesh Chief Minister Chandrababu Naidu announced.

However, Mr. Naidu clarified that TDP will not be quitting NDA just yet.

"The Centre has been taking one sided decisions and our patience has run out now. When the purpose of joining the union cabinet hasn’t been fulfilled, it’s best to resign now," Mr. Naidu tweeted after announcing the decision, adding that he had tried reaching out to Prime Minister Narendra Modi but the latter had been "unavailable". "It's a crucial time. We have to stand, we have to fight, we have to get it done," he added.

I am not angry with anyone. This decision has been taken only to benefit the people of Andhra Pradesh. — N Chandrababu Naidu (@ncbn) March 7, 2018

Continuing agitation

TDP has been agitating both inside and outside Parliament since the union budget was announced on February 1, claiming that none of the State’s demands were met. Things came to a head on Wednesday after Mr. Jaitley, in a press conference in the capital, shifted the blame on the Andhra Pradesh government and TDP. Without mincing words, he said that the Centre was “committed” to giving financial assistance to Andhra government, but said they had been modifying their demands.

Soon after Mr. Jaitley’s press conference wrapped up, the party went into a huddle. Mr. Naidu had a teleconference with TDP MPs who were in Delhi for the ongoing Parliament session, in addition to consulting legislators in Andhra Pradesh. The overwhelming view was to pull out of NDA.

Civil Aviation Minister Ashok Gajpathi Raju who was attending council of ministers meeting chaired by Prime Minister Narendra Modi was kept out of loop. “He was told only after he came out of the meeting,” a senior TDP MP said.

Jaitley cites 14th Finance Commission

“We are committed to give monetary equivalent of a special status to Andhra Pradesh. We are awaiting response from Andhra Pradesh government,” Mr. Jaitley said in his briefing, adding that just because it was a political issue, the quantum of assistance could not be increased.

Citing the 14th Finance Commission, the Finance Minister said that category of “special status” no longer existed. Therefore Andhra Pradesh could no longer be categorised as such.

He also cited technical reasons for the delay in the releasing assistance to the State. The AP government, Mr. Jaitley said, initially wanted the assistance to be routed as loans through external agencies like World Bank, Asian Development Bank and so on. Under this, the Union government would have paid 90% of the loans.

“This year [in] January they modified the request; instead of externally aided projects, they asked us to provide it through NABARD loan,” Mr. Jaitley said, adding that it was almost as if union government was waiting to pay the funds but was waiting for a bank account number.

Uneasy equation

For over a year, the two allies have shared an uneasy equation. In January, Prime Minister Narendra Modi met Mr. Naidu after a gap of a year. Mr Naidu, in his speech in Andhra assembly, said that he visited the capital 29 times with no results to show.

As a last ditch effort, on Monday evening a delegations led by TDP minister Y.S. Chowdary had scheduled a meeting with BJP President Amit Shah. Mr. Shah however left for Guwahati before the meeting. The delegation which included Andhra Pradesh Finance Minister Yanamala Ramakrishnudu had to leave without any concrete assurances.

Storm clouds over the alliance

BJP leaders who had seen the storm clouds over the alliance building were watching the developments with an air of resignation. Senior office bearers of the party said that the BJP had “tried till the last minute” to salvage the alliance and added that they “knew” that TDP Chief N. Chandrababu Naidu did not “really” want to break the alliance.

“He (Mr. Naidu) is under a lot of pressure as YSR Congress Chief Jagan Mohan Reddy is exerting great pressure on the implementation of the Special Category Status and TDP’s continuance in the government is a sign that he is not putting enough pressure on the Centre,” said the source. YSRCP MPs have threatened to resign their seats in Parliament on April 6 if the SCS is not granted.

The party leader said that “neither of us wants to break the alliance but the pressure on Naidu to take precipitate action is great, with elections just a year away.”