Hyderabad: The Union Cabinet on Sunday held out major concessions for the residuary state of Andhra Pradesh following the state bifurcation. Union minister Jairam Ramesh told the media after the meeting that the Cabinet had taken a decision to issue an ordinance providing special category status to the residuary state of Andhra Pradesh for five years after bifurcation.
The Planning Commission has been instructed to this effect, Mr Ramesh said, fulfilling an assurance made by Prime Minister Manmohan Singh in the Rajya Sabha. By this change, the grant that is normally given to a state, which is only 30 per cent, will be increased to 90 per cent. Only the remaining 10 per cent would constitute a loan, unl-ike 70 per cent for non-special category states.
These states also get a larger pie of the Central tax revenues from the Finance Commission. There was a demand for tax incentives for 10 years for the residuary AP. Industry in special category states enjoy concessions in excise and customs duties, income tax and corporate tax rates. All these incentives amount to 15 to 20 per cent of the sales revenue of a company.
The Cabinet also decided to amend the Telangana Bill and issue an ordinance regarding the villages that will be submerged in six mandals of Khammam district due to the construction of the Polavaram dam. The villages facing submergence in Khammam district will be included in Seemandhra, where the dam too is located. This way, the project oustees can get compensatory land in the same mandal.
The relief and rehabilitation package will be strictly implemented, Mr Ramesh said
