The Centre on Wednesday provided a Special Development Package for the lesser developed areas of Andhra Pradesh (AP).

In addition, it will also provide appropriate fiscal measures such as tax incentives to promote industrialisation and economic growth in both AP and Telangana.

In a statement, the Finance Ministry said the Centre is committed to support Andhra Pradesh, providing a special development package to backward areas and the Rayalaseema and North coastal regions of the State. “ It has now been decided that funds amounting to ₹350 crore (₹50 crore per District) in seven Backward Districts of Andhra Pradesh may be provided to Government of Andhra Pradesh during 2014-15 for its development activities,” it said.

An inter-ministerial joint committee constituted by the Home Affairs Ministry is also taking stock of the situation in the state and will recommend measures to bridge the resource gap in the upcoming Budget. Meanwhile, an ad-hoc support of ₹500 crore for the current financial year will be provided to the State, pending recommendations of the committee, the statement added.

The Centre has decided to extend fiscal incentives to both Telangana and Andhra Pradesh. The incentives include an additional depreciation allowance and an investment allowance without insisting on an investment above ₹25 crore.

It has decided to extend 15 per cent additional depreciation on new plant and machinery in the first year of installation for manufacturing industries in the backward regions.

Also an additional allowance of 15 per cent will be given to industries set up in backward regions for investments made in new plant and machinery in any of the five years for which the additional concession is notified. Even if the investment is made in the fifth year, the allowance would be available, the statement added.

Related Topics