The Union Cabinet on 15 March 2017 approved a special financial assistance for bifurcated Andhra Pradesh. This financial assistance will be provided by special dispensation in funding of Externally Aided Projects (EAPs.
The financial assistance will be also provided for the irrigation component of Polavaram project.
The special assistance will be provided to the state towards repayment of loan and interest for EAPs signed and disbursed from 2015-16 to 2019-20. The decision to this effect was taken at a Union Cabinet meet chaired by Prime Minister Narendra Modi.
Modalities for implementation of the decision:
Externally Aided Projects: Andhra Pradesh will be provided with a special assistance measure by the Union Government. Under this measure, the centre would make up for the additional central share the state might have received during 2015-16 to 2019-20. This will be done is the funding of the Centrally Sponsored Schemes (CSS) would have been shared at the ratio of 90:10 between the Centre and the State.
In addition to this, the special assistance will be provided by way of repayment of loan and interest for the Externally Aided Projects (EAPs) signed and disbursed during 2015-2016 to 2019-20 by the State.
This support in repayment of the EAP loans will help Andhra Pradesh to put its finances on a firmer footing and promote economic growth.
Polavaram project: The Union Government will also fund 100 per cent of the irrigation component of the Polavaram project starting from 1 April 2014. Completion of the Polavaram project will help in increasing irrigation prospects in the state.
As per an official release, the work on the project will be executed by the Andhra Pradesh government on behalf of the Union Government. However, other works like overall coordination, design issues, monitoring, quality controls, clearances and other related issues will be dealt by the Polavaram Project Authority of Ministry of Water Resources, River Development & Ganga Rejuvenation.
The Polavaram Project Authority will also assess out the cost of the irrigation component as on 01 April 2014 in consultation with the Department of Expenditure, Ministry of Finance.
The above mentioned special financial assistance is being provided to Andhra Pradesh in accordance with the union government’s commitment to the state under the Andhra Pradesh Reorganisation Act 2014. During the financial year 2016-17, the centre has provided the special assistance of Rs 1976.50 crore to the state. This allocation includes
• Rs 1176.50 for Resource Gap
• Rs 350 crore for the development of 7 backward districts covering Rayalaseema & North Coastal region
• Rs 450 crore as assistance to the capital city
In addition to this, the Union Ministry of Water Resources has provided Rs 2081.54 crore for the Polavaram Irrigation Project during the existing financial year.
Since enactment of the Andhra Pradesh Reorganisation Act 2014, the Union Government has provided central assistance of Rs 10461.04 crore to the state of Andhra Pradesh. The funds include
• Rs 4403 crore released during 2014-15
• Rs 2000 crore released during 2015-16
• Rs 4058.04 in released in 2016-17