"As part of its commitment to the people and compensate the financial impact arising out of the bifurcation of the state, the central government decides to give Special Assistance of Rs 1,976.50 crore to Andhra Pradesh during 2016-17," the Finance Ministry said in a statement today.
The amount includes Rs 1,176.50 for resource gap, Rs 350 crore for development of seven backward districts covering Rayalaseema & North Coastal region and Rs 450 crore as assistance for the capital city, it added.
The statement further said that with the current sanction of funds, the central government has so far provided central assistance of Rs 8,379.50 crore to Andhra Pradesh which includes Rs 4,403 crore released during 2014-15 and Rs 2,000 crore released during 2015-16 in terms of the provisions under the Andhra Pradesh Re-organisation Act, 2014.
It said that cumulatively from the enactment of the Re-organisation Act from June 2, 2014 till 2016-17, Rs 3,979.50 crore has been released to the successor state of Andhra Pradesh for bridging the resource gap for the financial year 2014-2015.
The Re-organisation Act entrusts the central government to make appropriate grants in the form of special assistance to the backward areas of successor states, provide assistance for creation of new capital of Andhra Pradesh and provide assistance to bridge the resource gap arising post- bifurcation.