Union Government announced 850 crore rupees development package for Andhra Pradesh

Union Government on 4 February 2015 approved a development package and ad hoc support of 850 crore rupees for Andhra Pradesh.

The development package was provided for the development of backward areas and Rayalaseema and North Coastal region of the State. Under Sections 46 (2) and 46(3) of the Andhra Pradesh Reorganisation Act, 2014, Union government is committed to provide the development package.

Out of the total 850 crore rupees, 350 crore rupees will be provided for the development activities in seven backward districts of the State and 500 crore rupees will be provided as an ad hoc support for bridging the resource gap that might have arisen in the Union Budget 2014-15.

Besides this, the Union government also decided to provide tax sops to promote industrialization and economic growth in both Andhra Pradesh and Telangana. These are:

• The manufacturing industries set up in the backward region will be given 15 percent additional depreciation on new plant and machinery in the first year of installation.
• An additional investment allowance of 15 percent would be given to industries set up in the backward regions.
• The additional depreciation allowance and investment allowance will be provided without insisting on an investment of above 25 crore rupees.