The Centre will provide an additional Rs 1,976.50 crore as 'special allowance' to Andhra Pradesh during the current fiscal to mitigate the losses arising out of bifurcation of the southern state.
"As part of its commitment to the people and compensate the financial impact arising out of the bifurcation of the state, the central government decides to give Special Assistance of Rs 1,976.50 crore to Andhra Pradesh during 2016-17," the Finance Ministry said in a statement today.
The amount includes Rs 1,176.50 for resource gap, Rs 350 crore for development of seven backward districts covering Rayalaseema & North Coastal region and Rs 450 crore as assistance for the capital city, it added.
Recently, Andhra Pradesh Chief Minister N Chandrababu Naidu had met Prime Minister Narendra Modi during which he is believed to have raised the issue of special status for his state.
The statement further said that with the current sanction of funds, the central government has so far provided central assistance of Rs 8,379.50 crore to Andhra Pradesh which includes Rs 4,403 crore released during 2014-15 and Rs 2,000 crore released during 2015-16 in terms of the provisions under the Andhra Pradesh Re-organisation Act, 2014.
It said that cumulatively from the enactment of the Re-organisation Act from June 2, 2014 till 2016-17, Rs 3,979.50 crore has been released to the successor state of Andhra Pradesh for bridging the resource gap for the financial year 2014-2015.
The statement said that Rs 1,050 crore (Rs 50 crore per district) has been provided for the development of seven backward districts covering Rayalaseema & North Coastal region, Rs 2,500 crore has been provided as assistance for the capital city which includes Rs 1,000 crore released by the Union Ministry of Urban Development for sewerage & drainage schemes at Guntur and Vijayawada cities respectively.
The Re-organisation Act entrusts the central government to make appropriate grants in the form of special assistance to the backward areas of successor states, provide assistance for creation of new capital of Andhra Pradesh and provide assistance to bridge the resource gap arising post- bifurcation.