State Reorganisation - Union's Commitment - Status Report

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limits. The Union also declined the State’s
request to disburse Special Assistance in
other forms like repayment of loans due to
Government of India and its parastatals.
Given these circumstances, if the benefit of
Special Assistance to a tune of
Rs.16,447 Crore were to be extended to
Andhra Pradesh State, it is necessary to allow
the State to avail the Special Assistance in the
following manner:
1. Repayment of EAP loans and interest
2. Repayment of principal and interest of
Special Development Loans by
arrangement of set off with RBI
3. Repayment of other dues with loan and
interest to Government of India by
adjustment
4. Repayment of loans and interest due to
parastatals of Government of India
including Small Savings, NABARD, and
NCDC by transfer of funds by
Government of India, in lieu of repayment
by Government of Andhra Pradesh
5. Repayment of loans with interest to other
parastatals including PFC, REC,
HUDCO; repayment may be made by
direct transfer by Government of India to
these parastatals on account of Andhra
Pradesh State parastatals. Necessary
budgetary arrangements should be
made by Government of Andhra Pradesh
to adjust for these payments
6. As Government of India takes over
responsibility to repay EAP loans, the
Status Report - Union’s Commitment to Andhra Pradesh
liability of EAP may be taken out from the
accounts of Government of Andhra
Pradesh, and the amount may be
exempted from FRBM limit
7. Government of India may treat 90% of
EAP amount as grants to Government of
Andhra Pradesh on par with the Special
Category States
8. The amount of Rs. 16,447 Crore would
be a significant commitment for
Government of India given its strained
fiscal position. It is therefore suggested
that the Union Government could consider
issuing short/medium tenure AP Relief
Bonds to raise these resources as well
as other financial obligations as part of
Special Assistance towards Andhra
Pradesh
The purpose of the Special Assistance in this
case is clearly to give the State of Andhra
Pradesh the benefit equal to 90% share of the
Union government in Centrally Sponsored
Schemes during the five-year period. This
amount is estimated at Rs. 16,447 Crore. The
EAP window is wholly insufficient to extend the
intended Special Assistance to the State.
Even in the best case scenario, the total
assistance under EAP will not exceed
Rs. 4,000 to 5,000 Crore. In actual fact, as of
December 2018, over three years, nine
months, a paltry amount of Rs.15.81 Crore has
been the assistance extended to the State. By
insisting on EAP window as the sole means of
assistance, the purpose of special assistance
is defeated.
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