Centre development package does not have much for Telangana, Andhra Pradesh
Hyderabad: Fulfilling a long-standing promise made in the Reorganisation Act, the Centre on Wednesday sanctioned a special development package of Rs 350 crore to seven districts of AP, which along with Telangana got a slew of tax incentives.
The announcement was met with some disappointment, and the suspicion that it had been cleared with an eye on the Telugu vote in the Delhi elections. The announcement was made by the Union finance ministry, which also announced Rs 500 crore as ad hoc support for AP for the current financial year as part of the efforts to bridge the resource gap.
The announcement of special package to AP and Telangana as per the Reorganistaion Act was announced by the finance minister. Besides, an inter-ministerial joint committee, constituted by home ministry, is also taking stock of the financial situation in AP to make recommendations to bridge the likely resource gap in the Central Budget 2014-15. The notification also said the Union government would provide appropriate fiscal measures, including offer of tax incentives, to the successor states, to promote industrialisation and economic growth.
“The manufacturing industries set up in the backward region, as notified, would be given 15 per cent additional depreciation on new plant and machinery in the first year of installation. An additional investment allowance of 15 per cent would be given to industries set up in the backward regions, as notified, for investments made in new plant and machinery in any of the five years for which additional concession would be notified,” it said.
Even if the investment were made in the fifth year, the investment allowance would be available. The notification also said that the additional depreciation allowance, and investment allowance will be provided without insisting on an investment of above Rs 25 crore.
