The Central Government will bridge the revenue gap which the Seemandhra region is likely to face post the division of Andhra Pradesh into two States, according to Jairam Ramesh, Union Minister for Rural Development.
The resource gap may arise in the successor State of Andhra Pradesh (Seemandhra) in the very first year, especially during the period between the Appointed Day and the acceptance of the 14th Finance Commission recommendations by the Government of India. This will be compensated by the regular union budget for 2014-15.
He explained that the Centre may, having regard to the resources available to the successor State of Andhra Pradesh, make appropriate grants and also ensure that adequate benefits and incentives in the form of special development package are given to the backward areas of that State.
Addressing a press conference here, he said the award made by the Thirteenth Finance Commission to the existing state of Andhra Pradesh shall be apportioned between the successor states by the Central government on the basis of population ratio and other parameters.
He said the President shall make a reference to the Fourteenth Finance Commission to take into account the resources available to the new states and make separate wards for each of the successor States.
The Union Minister said that the Centre shall take appropriate fiscal measures including offer of tax incentives to promote industrialisation and economic growth in both the States.
The Centre will extend incentives for the creation of new infrastructure. This includes a new major port at Duggirajapatnam, a steel plant in Kadapa, a petrochemical complex near Kakinada, set up Vizag-Chennai industrial corridor on the lines of Delhi-Mumbai industrial corridor and expansion of existing airports among others.
The Rayalaseema region will have special development package and ongoing irrigation projects will be implemented as per plans.
The Seemandhra region will get a special category status for five years and new industries will have tax benefits for 10 years. This is expected to put the State’s finances on a firmer footing.
Answering queries, he said, “Congress could have communicated better in both the regions about the division and its prospects for them.”
“An expert committee will make representation on the location of new capital within six months and the funds required for developing the infrastructure would be from the Centre,” he said.