AP to enjoy tax sops for 10 years

Jairam Ramesh tries to assuage hurt feelings of Seemandhra

Incentives galore

• Minimum Rs 50,000 cr worth benefits will accrue to AP in 5 years due to special status
• Committee on capital this week; Centre and State will decide new capital location
• River boards will not allocate water; to implement judicial awards only
• Centre will ensure equitable distribution of river waters between the two States
• Upgradation of Vizag, Tirupati, Vijayawada airports to be taken up immediately
• No change in admission process or quota in next 10 years in both States
• Two committees to be set up very soon on division of government employees
• Vizag-Chennai corridor will see Rs 1 lakh cr investments in next 10 to 15 years
• Polavaram project will cost the Centre around Rs 20,000 crore

Visakhapatnam: Union Minister for Rural Development Jairam Ramesh said that the Prime Minister Manmohan Singh had announced that as per the AP Reorganisation Act the residuary State of Andhra Pradesh will enjoy the special category status for five years and tax exemptions for 10 years.

There will be no change in the admission process or in quota for education in both the States. The existing admission process will continue for 10 years.

Addressing media persons here on Monday, Jairam Ramesh also said that a committee would be set up in the next three to four days to identify suitable location for capital of Andhra Pradesh. It would have six months time for the job. Several cities like Tirupati, Kurnool, Ongole, Nellore and also Visakhapatnam will be studied for location of the capital. The Centre and the Andhra Pradesh government would decide where to locate the capital.

Asked if Visakhapatnam as capital would not be feasible because it was located in one corner, Jairam Ramesh said it could not be said so, as State capitals like Chennai, Mumbai, and Bangalore are located at far-off places from some areas of those States. He informed that the Central government would set up two expert committees very soon on distribution of government employees.

On the river water sharing issue, he said that two separate boards would be set up for Krishna and Godavari rivers and the chairman of the two boards will be a technical person, not a politician. The Union Minister clarified that the boards would not allocate water. They would implement judicial awards only. The Centre would ensure equitable distribution of river water between the two States.

Elaborating on the features of the AP Reorganisation Act, he said it contains tax incentives for the backward areas of Telangana and Andhra Pradesh like Income Tax relief, Excise, VAT relief and other duty exemptions. In addition, the Act mentions commitment of the Central government to certain major investments in Seemandhra like upgradation of Visakhapatnam, Vijayawada and Tirupati airports to international standards immediately.

The special category status is modelled on the lines of the Bundelkhand package for Uttar Pradesh and Madhya Pradesh for agriculture, irrigation, drinking water, livelihood security. The total value of the package is Rs 11,000 crore over seven years. Jairam said that the estimated a minimum benefit in the next five years to the extent of Rs 50,000 crore on account of the special category status.

The Act promises establishment of a petroleum refinery and a petrochemical region in Seemandhra. The Central Government will establish metro rail projects in Visakhapatnam, Vijayawada and Tuntur, and start the Visakhapatnam-Chennai industrial corridor on the lines of Delhi-Mumbai industrial corridor being implemented by the Government with Japanese assistance.

He said the Visakhapatnam-Chennai corridor would stimulate investment for the next 10 to 15 years and at least Rs 1 lakh crore

On the Polavaram project, he said the Government of India would execute the project which is expected to cost Rs 20,000 crore. It is a national project and it would provide drinking water to Visakhapatnam, water for irrigation in Godavari basin and transfer water from Godavari to Krishna basin to help Telangana also, he pointed out.