Andhra gets Rs 8.5 bn development package

Wednesday 11th February 2015 06:21 EST

The NDA government has given Rs 8.50 billion as special development package as well as a slew of concessions for the industrial sector for both AP and Telangana. The funds for AP include Rs 5 billion as 'ad hoc support' to bridge the resource gap for the current financial year as well as Rs 3.50 billion as special development package for the backward areas in Rayalaseema and north coastal districts.

The release of funds came ahead of AP chief minister Chandrababu Naidu's visit to Delhi. "The release of the funds by the Centre is a welcome step but AP is expecting much more," an AP government official said. While announcing Rs 5 billion, the Centre said this was only by way of an ad hoc support for the current financial year. "An inter-ministerial joint committee is taking stock of the financial situation of the government of AP and will make appropriate recommendations to bridge the likely resource gap in the central budget 2014-15," a finance ministry statement said. As a result, the AP government is hopeful of more funds in this fiscal itself.

The Rs 3.50 billion has been released as per Section 46 (2) and Section 46 (3) of the Andhra Pradesh Reorganisation Act, 2014, which pledge the Centre's support to AP in providing a special development package to the backward areas of Rayalaseema and north coastal region of the state. The four districts of Anantapur, Chittoor, Kadapa and Kurnool in Rayalaseema and three districts of Visakhapatnam, Vizianagaram and Srikakulam in north coastal Andhra will get Rs 500 million each for development activities for 2014-15.

The Centre also sanctioned some sops for the promotion of the industrial sector in AP. Accordingly, the manufacturing units set up in the backward region are to be given 15 per cent additional depreciation on new plant and machinery in the first year of installation. Besides, an additional investment allowance of 15 per cent is to be given to industries set up in the backward regions for investments made in new plant and machinery in any of the 5 years for which additional concession would be notified. Even if the investment is made in the 5th year, the investment allowance would be available, the finance ministry statement said.

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