Seemandhra region will have 'special category' status for five years, according to Sunday's decision of the Union Cabinet which also approved two amendments to the just-passed Andhra Pradesh Reorganisation Bill to address the concerns of the respective regions.
While the first amendment deals with resettlement and rehabilitation of those displaced due to Polavaram power project, the second relates to sharing of electricity generated by central units like NTPC between Telangana and Seemandhra.
The two-hour-long Cabinet meeting gave approval to the announcement made by Prime Minister Manmohan Singh for granting special category to Seemandhra region, comprising 13 districts, for five years.
Briefing reports, Union minister Jairam Ramesh said the Cabinet directed the Planning Commission to implement the decision to grant special category status to 13 districts of Seemandhra as per the Prime Minister's announcement.
The Planning Commission is the administrative body and the central assistance will be routed through it, he added.
The proposal includes a six-point development package for Seemandhra like tax incentives.
These will include the four districts of Rayalaseema and three districts of north coastal Andhra to put the state's finances on a firmer footing, he said.
The Bill already provides for a special development package for backward regions of successor state of Andhra Pradesh, in particular for the districts of Rayalaseema and North Coastal Andhra Pradesh.
The development package will be on the lines of the KBK (Koraput-Bolangir-Kalahandi) Special Plan in Odisha and the Bundelkhand special package in Madhya Pradesh and Uttar Pradesh.
The Cabinet also decided to bring an amendment under which 85% of the electricity generated by central units will be allocated to the two states as per population and only 15% will be allocated based upon their actual consumption pattern of the last five years.
In the Bill, it is proposed that power will be distributed on the basis of energy consumption in the last five years.
Ramesh said the committees to select a new capital for Seemandhra will start working tomorrow.
To a question, Ramesh asserted that the notification regarding the appointed date for division will be issued during the tenure of the UPA government itself.
He said the first amendment is to faciliate smooth and fair resettlement and rehabilitation on part of Polavaram multi-purpose project.
"The amendment will enable land for land in the same reveneu division where people will be displaced," he said.
Politicians from Khammam district of Telangana region were demanding that the Polavaram submergence areas in Bhadrachalam revenue division should not be merged with Seemandhra region.
Ramesh said the Cabinet approved another amendment in the Andhra Pradesh Reorganization Bill to clear ambiguity.
"There was some ambiguity in the bill on sharing of electricity. The bill said that power from central electricity generating stations will be allocated to two states based on their actual consumption capacity for five years," Ramesh said.
He added that the Cabinet amendment has on Sunday made it clear that only 15% of the unallocated power will be distributed as per the actual energy consumption of the regions for last five years.
"85% power will continue to be allocated as per Gadgil formula, which is distribution of electricity largely on population ratio. People of Seemandhra and Telangana had asked for clarity on the issue," he said.
Ramesh said that these decisions flow out of the assurance given by the Prime Minister on the floor of Rajya Sabha on February 20.