The decision was taken at a meeting of the state cabinet, chaired by the Chief Minister N Chandrababu Naidu, here.
Information minister P Raghunadha Reddy told the reporters later that the cabinet had decided to implement new sand policy from February 2016 and to promote production of Robo sand, which is produced from the rock.
Any area which can produce one lakh cubic meters of sand would be identified as a 'sand reach' and auction would be conducted for sale of sand from such a reach.
The cabinet also sanctioned hike in wages for Anganwadi workers from Rs 4,200 to Rs 7,000 per month.
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Street lights with LED bulbs will be installed at 659 major villages in the state for which about 3.5 lakh LED bulbs are required, he said.
This is expected to reduce the maintenance cost by half, leading to saving of Rs 25 crore annually.
The cabinet also approved 'medical equipment procurement policy' for the government hospitals under which new equipment will be provided to government hospitals and labs.