Centre approves to give special assistance to Andhra Pradesh

The Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday gave approval to give Special assistance measure for the Successor State of Andhra Pradesh through the way of special dispensation in funding of Externally Aided Projects (EAPs) and funding of irrigation component of Polavaram project.

The modalities for implementation of the announcements for providing central assistance to the State of Andhra Pradesh are as follows:

i. The Central Government will provide special assistance measure to Government of Andhra Pradesh, which would make up for the additional Central share the State might have received during 2015-16 to 2019-20, if the funding of Centrally Sponsored Schemes (CSS) would have been shared at the ratio of 90:10 between the Centre and the State. The special assistance will be provided by way of repayment of loan and interest for the Externally Aided Projects (EAPs) signed and disbursed during 2015-2016 to 2019-20 by the State.

ii. Funding of 100 percent of the remaining cost of the irrigation component only of the Polavaram project for the period starting from 1.4.2014, to the extent of the cost of the irrigation component on that date. Andhra Pradesh Government will execute the project on behalf of Government of India. 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 & Ganga Rejuvenation. The Polavaram Project Authority will also assess out the cost of the irrigation component as on 01.04.2014 in consultation with the Department of Expenditure, Ministry of Finance.

This support for capital expenditure by way of repayment of EAP loans would help and assist the newly formed state of Andhra Pradesh to put the State's finances on a firmer footing and promote economic growth.

Further, the central funding of the irrigation component of the Polavaram Irrigation Project and its execution by the State Government shall expedite completion of the project and the increase irrigation prospects in the State benefitting the people at large.