AP may get 50% of Centre's revenue

Andhra Pradesh would be among the 11 states to benefit from the recommendation of the 12th Finance Commission, which suggested to the Government of India (GoI) to share revenue with states under the profit sharing contract (PSC) entered with oil companies.

The GoI is yet to issue any orders based on the 12th Finance Commission's recommendation on income sharing.

According to the state finance department officials, the 12th Finance Commission has recommended that 50 per cent of the income received by the Centre through the PSCs with the oil companies including the royalty be given to the respective states.

This applies to those exploration operations which commenced under the new exploration licencing policy (NELP).

Like Andhra Pradesh, most of the states will otherwise get no royalty from the offshore gas and oil finds as they are out of the states' purview.

With the recent announcement by Gujarat chief minister Narendra Modi on the huge gas find struck by Gujarat State Petroleum Corporation (GSPC), the K-G Basin once again has become the centre of discussion.

"Under these PSCs, the Centre will receive the revenue in the form of gas too, which would be up to 20 per cent of the total production. So the state will also gain by utilising the share in this," chief minister Y S Rajasekhara Reddy said here today. Revenue under PSCs also includes the royalty paid by the oil companies.