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The Union Cabinet on Wednesday approved special assistance for Andhra Pradesh, which was announced last year in lieu of the promised special category status.
The Cabinet meeting chaired by Prime Minister Narendra Modi approved the special assistance in funding of externally-aided projects and irrigation component of Polavaram project.
The central government will provide special assistance to Andhra Pradesh, which will make up for additional central share the state might have received during 2015-16 to 2019-20, if the funding of the centrally sponsored schemes would have been shared in 90:10 ratio between the Centre and the state, said an official release.
The special assistance will be provided by way of repayment of loan and interest for the externally aided projects signed and disbursed from 2015-16 to 2019-20 by the state.
The Centre will fund 100 per cent of the cost of irrigation component of the Polavaram project from April 1, 2014.
The Andhra Pradesh government will execute the project on behalf of the Centre.
However, the overall coordination, quality control, design issues, monitoring, clearances related issues etc. are to be dealt by the Polavaram Project Authority of Ministry of Water Resources, River Development and Ganga Rejuvenation.
The Polavaram Project Authority will also assess the cost of the irrigation component as on April 1, 2014 in consultation with the Department of Expenditure, Ministry of Finance.
Union Minister of State for Science and Technology Y.S. Chowdary hailed the Cabinet approval as victory of Andhra Pradesh people. He said it was the culmination of efforts by Chief Minister N. Chandrababu Naidu.
He said this was proof of the high priority the NDA government is giving to fulfilling its promises and commitments.
Union Finance Minister Arun Jaitley in September last year announced special assistance measures while ruling out special category status announced by the Centre in Parliament in 2014 at the time of bifurcation of Andhra Pradesh.
Though the BJP had also promised special status, it could not fulfil it in view of the recommendations of the 14th Finance Commission.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)