In a much relief to Andhra Pradesh state, the Union government has granted a special package of Rs 850 crore and also some tax exemptions. As per the Andhra Pradesh Reorganisation Bill 2013, under section 46[2], 46[3], backward regions of AP i.e, North Andhra and Rayalaseema districts were granted a packages of Rs 350 crores and Rs 500 crores for its revenue deficit. The Union Finance Ministry said, it would provide the entire fund for the 2014-15 year. However, this package won't be enough for the state which has Rs 15,000 crores revenue deficit.

Further, the Finance Ministry has set up an internal cabinet committee which will analyses the financial status of Andhra Pradesh state. This committee will list out suggestions to the Finance Ministry and as per the suggestions, AP state would be allocated funds and given preference in the Union budget which will be presented in Parliament later this month. But before the committee gives its reports, with an immediate effect, Finance ministry has granted Rs 500 crores to AP state.

The Finance Ministry has also given tax exemptions to Telangana state and in notified districts of AP, Telangana states, manufacturing sector is likely to get 15 per cent tax exemption. The exemption for Rs 25 crores and above limit has also been overlooked and tax exemption will be applicable to any sort of investment.

- TVR