State Reorganisation - Union's Commitment - Status Report

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Status Report - Union’s Commitment to Andhra Pradesh Table 2.2 Revenue and Liabilities based on AP Reorganisation Act, 2014 It can be seen from Table 2.2 that Telangana receives huge share in revenues from arrears and deferred taxes disproportionate to its population, while its burden of refunds is much less than the share of the population. Table 2.3 shows the revenue of Andhra Pradesh and Telangana on removal of anomaly by apportioning both arrears and refunds on population basis. It can be seen from Table 2.3 that the share of Andhra Pradesh State in arrears and deferred taxes increases significantly if population ratio is adopted for arrears and deferred taxes also on par with refunds. Table 2.3 Revenue and Liabilities if anomaly in law is corrected Loss of Net Revenue incurred by the State of Andhra Pradesh on account of the anomaly is Rs. 3,820.36 Crore (Net Revenue) If anomaly is corrected - Rs. 6,841.56 Crore Net Revenue under present law - Rs. 3,021.20 Crore Loss: Rs. 6,841.56 – Rs. 3,021.20 = Rs. 3,820.36 Crore - 35 -
Loss Incurred on Account of Anomalies of Law In this regard, it may be noted that the Supreme Court in Civil Appeal No. 3019-3020 of 2016 (rising out of SLP No.14705-14706 of 2015) held that,“when an existing State if bifurcated to form new States, there must be an equitable bifurcation of assets and liabilities of the statutory bodies among the two Successor States as well to ensure welfare of the public at large residing within these States”. The Supreme Court negated the location theory by observing that merely because an institution is located in Hyderabad, the Successor State cannot appropriate all its assets. Ideally, the Andhra Pradesh Reorganisation Act, 2014 should have provided for suitable apportionment of tax arrears and deferred taxes treated as interest between the Successor States in proportion to population, similar to other refunds under Section 56. However, after more than four years, an amendment of law is neither feasible nor desirable. After years of unrest and divisions in Telugu society based on regional sentiments, harmony has largely been restored between people of both States. Any amendment now may reignite regional passions, disrupt harmony between the people of both Telugu States, and undermine unity and integrity of the nation. Under these circumstances, we must apply the broader principle that the loss sustained by Andhra Pradesh due to anomalies of law of Parliament should be compensated by the Union. Therefore, the loss of Rs. 3,820.36 Crore to Andhra Pradesh on account of anomalies in Sections 50 and 51 of Andhra Pradesh Reorganization Act should be made good by the Union government, as it is the law of Parliament that has created such situation. - 36 -
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Page 8 and 9: FOREWORD Status Report - Union’s
Page 12 and 13: Introduction Status Report - Union
Page 16 and 17: The people of all sections of the S
Page 22 and 23: A. DISALLOWED EXPENDITURE 1. Financ
Page 24 and 25: Security Pensions should be conside
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Progress / Developments Consequen
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State Reorganisation - Union's Commitment - Status Report

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