Rs 1 lakh cr package in the works for residuary Andhra

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The UPA government is working on a Rs 1,00,000 crore package for Andhra Pradesh after carving out the new state of Telangana with Hyderabad as the joint capital for the next 10 years.

The package will be rolled out in phases ahead of Congress president Sonia Gandhi’s scheduled election campaign starting next month.

In formulating the package, the Congress party is seeking to buy peace with its legislators, members of Parliament and ministers from Seemandhra and Rayalaseema regions, who were up in arms against the bifurcation.

“A politically-saleable package quantified in numbers will be worked out for the residual Andhra Pradesh state following bifurcation,” a senior minister clued into the working of the plan confided to Financial Chronicle.

The proposed package will be dovetailed into the “special category status” to be accorded to Andhra Pradesh, as was promised by prime minister Manmohan Singh in Rajya Sabha.

The Union cabinet is likely to clear the proposal to provide special category status to residual Andhra Pradesh this Friday. The nuts and bolts of the economic package would be unveiled once the prime minister takes a call on the quantum of assistance.

A decision on the size of the package has assumed urgency, as the code of conduct may come into effect any time in the next few days after the election commission announces the schedule for Lok Sabha polls.

The Rs 1,00,000 crore package will include an additional component of central assistance. Three northern Andhra and four Rayalaseema districts would be eligible for special grants once the special category status is accorded to the state.

Development projects, especially anti-poverty alleviation schemes, for these seven districts would be on the lines of what is available for the KBK districts of Odisha, viz., Koraput, Bolangir and Kalahandi, or under the Bundelkhand special plan.

In the past two days, rural development minister Jairam Ramesh has suggested incorporation of specific numbers to the economic package during meetings with Congress policymakers from both Seemandhra and Rayalaseema regions.

A senior MP from Rayalaseema region told this newspaper that the package would be politically more saleable for the party in both the regions of residual Andhra Pradesh.

This, to an extent, would limit the damage to the party and prevent its complete decimation in the two regions, he said. The MP did not wish to be identified in this report. The Rs 1,00,000 crore package seems to have been whipped up after most MPs, ministers and legislators either moved away from the party or resigned from its primary membership.

The package would be over and above the funds that would be made available for construction of a new capital. An apex committee at the centre has been set up to identify the location of the new capital city for Andhra Pradesh in six months to be modelled on the lines of Gandhinagar in Gujarat.

Prime minister Singh has already promised a six-point rehabilitation plan for Andhra Pradesh. It includes tax concessions to promote industry and provides for any resource gap for Andhra Pradesh in the first year i.e. 2014-15.

Planning commission deputy chairman Montek Singh Ahluwalia has set up a special cell in Yojana Bhavan to implement the prime minister’s six-point plan and structure the special package for Andhra Pradesh.

Congress president Sonia Gandhi and vice-president Rahul Gandhi are expected to tour both Telangana and Andhra Pradesh extensively to bolster the party’s prospects.

Telugu Desam Party supremo N Chandra Babu Naidu had demanded Rs 4,00,000 crore for the reconstruction of Andhra Pradesh after the bifurcation. BJP leader M Venkaiah Naidu made a similar demand in Rajya Sabha.

Initially, the government had mooted the idea of putting together the financial package after receiving the finance commission’s recommendations for both development and construction of the new capital.


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