Lok Sabha Question No. 2181 (UNSTARRED), answered on 2016-07-29
Subject: Financial Assistance to Andhra Pradesh
Ministry: FINANCE
Asked by: RENUKA BUTTA, Y. S. AVINASH REDDY

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF EXPENDITURE

## LOK SABHA UNSTARRED QUESTION NO. 2181

TO BE ANSWERED ON FRIDAY, July 29, 2016/Shravana 7, 1938 (SAKA)

## Financial Assistance to Andhra Pradesh

## 2181. SHRIMATI BUTTA RENUKA: SHRI Y.S. AVINASH REDDY:

Will the Minister of FINANCE be pleased to state:

- (a) whether the Union Government has received any request from Government of Andhra Pradesh (AP) and Telangana regarding providing financial assistance and tax incentives and if so, the details thereof;
- (b) whether the AP and Telangana Governments are also requested for implementations of promises such as release of funds to bridge the gap of budgetary deficit and requested for liberal financial assistance, if so, the details thereof; and
- (c) the response of the Union Government thereon?

## ANSWER

## MINISTER OF STATE IN MINISTRY OF FINANCE (SHRI ARJUN RAM MEGHWAL)

- (a) to (b): From time to time, requests for providing financial assistance and tax incentives in  terms  of  provisions  of Andhra Pradesh Reorganisation Act, 2014  have been received from the Government of Andhra Pradesh. Specifically, the request has been for providing special  grant  for  new  capital  city,  bridging  resource  gap,  Polavaram  Irrigation  Project  & development of backwards districts. The Government of Telangana has made request for special grant for backward  districts. Besides, requests for providing 'One  Time Assistance' for Krishna Pushkarams 2016 have also been received from these States. The requests received from the State Governments including  Andhra Pradesh and Telangana are  dealt  in  accordance  to  the  provisions  of  Andhra  Pradesh  Reorganisation  Act,  2014 taking into account resources available with the State(s) and availability of funds with the Union Government within the Gross Budgetary Support (GBS).
- (c): Accordingly, having considered resources available  with  the  State(s) and  availability of    funds    with    Union    Government    within    Gross  Budgetary  Support  (GBS),  since enactment of Andhra Pradesh Reorganisation Act, 2014, Central assistance of Rs.6,403 crore  (including  releases  made  by  Ministry  of  Finance)    has  been  provided  to  the  State Government   of   Andhra  Pradesh  under  various  provisions  of   the   Act.  The releases

made to the State of Andhra Pradesh includes funds provided for resource gap (Rs.2,803 crore), development of 7 backward districts covering Rayalseema & North Coastal Region (Rs.700 crore), new capital city (Rs.2,050 crore) and Polavaram Irrigation Project (Rs.850 crore). Similarly, Central assistance of Rs.450 crore has been provided for development of 9 districts  of  Telangana.  Further, as per section 94(1) of the AP Reorganization Act, 2014, Income Tax Act was amended in 2015 to provide tax concessions to the State of Andhra Pradesh  and  Telangana.  Accordingly,  the  States  are  eligible  for  additional  depreciation under  Section  32(1)  (iia)  of  the  Income  Tax  Act  and  for  additional  investment  allowance under  Section  32  AD  of  the  Income  Tax  Act.  The  Tax  benefit  has  been  extended  to Telangana.  In  case  of  Andhra  Pradesh,  the  backward  districts  for  the  purpose  of  tax incentives    could  not  be  notified  as  the  list  of  the  backward  districts  is  awaited  from  the State.

## *******