The Central government on Tuesday assured the Parliament that it was committed to honour promises as per the Andhra Pradesh Reorganisation Act of 2014 and said that it was working on a formula to release funds under a special package to the state.
The assurance came from Finance Minister Arun Jaitley in both the houses to pacify agitating members of the Telugu Desam Party, the YSR Congress and the Congress from Andhra Pradesh.
These members have been protesting for two days over what they termed "non- implementation" of the reorganisation Act.
"I have been fully sympathising and trying to make sure that every part of the Act and commitments made by the central government are honoured. The central government fully stands by it," Jaitley said in the Rajya Sabha.
"I think a solution by which an amount can be given through an alternative mechanism is being worked out," he added.
Jaitley said the Andhra Pradesh Finance Secretary will hold discussions with the Union Expenditure Secretary in New Delhi shortly to work out assistance for the state from externally-aided projects.
"One particular issue is of how the amount -- in view of the special status -- has to be paid. This, we had announced. This will be given and the state has requested for it," he said.
Explaining the matter, Jaitley said externally-aided projects are approved by external agencies like the Japan International Cooperation Agency and the World Bank and it takes time.
"So, the Chief Minister (N. Chandrababu Naidu) has written to me to seek its funding from NABARD (National Bank for Agriculture and Rural Development). But once it is funded from NABARD, it creates a problem with regard to addition to fiscal deficit because in that case the borrowing space of the state itself would be contracted," he said.
The Union Minister said the Centre had already provided Rs 3,900 crore to Andhra Pradesh as revenue deficit after its bifurcation.
Jaitley later gave a similar statement in the lower house.