Hyderabad: Centre on Wednesday sanctioned a special development package under Reorganization Act for Andhra Pradesh and Telangana. It announced a Rs 350 crore package to seven districts of AP, which along with Telangana got a slew of tax incentives.
The announcement was made by the Finance Minister Arun Jaitley, which also announced Rs 500 crore ad hoc support to AP for FY15 in order to bridge the resource gap in the state.
It was speculated that the announcement has been made just before the Delhi elections to attract Telugu votes.
Apart, from this an inter-ministerial joint committee appointed by home ministry will also keep an eye on the financial situation of AP and make necessary recommendations to bridge the resource gap ahead of Central Budget 2014-15.
According to the notification, Union government will also provide appropriate fiscal measures to the successor states, to promote industrialization and economic growth. This will include offer of tax incentives too.
The plan states that manufacturing industries set up in the backward region will be given 15 percent additional depreciation on installation of new plant and machinery in the very first year.
It also said that there will be another additional 15 percent allowance to these industries if they make investments in the new plant and machinery in any of the five years for which additional concession would be notified.
Even if the investment will be made in the fifth year, still the above-mentioned rule will be applicable.
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.
