Andhra Pradesh government is expecting an additional funding of 24271.91 Crore for the state exchequer due to the Special Package announced by Union finance minister Arun Jaitley that increased the Centre’s share in both Central Aided Projects (CAP) and External Aided Projects (EAP) to 90 percent from the existing 60 percent.
If the Center keeps up its word, the state will receive Rs 7,336 crore to compensate for 201516 and 2016-17 financial years. As a part of this package, Center will be bearing 30 percent extra funding in all CAP and EAP schemes from 2015 to 2020. EAP schemes offer money at lower interest rates and also moratorium in the name of tax holiday starting from three to seven years.
Also, they come as a huge respite to the state as the repayment starts only after 7 years. As per the projections, for 2017-18, the state would get 4,139 crores, for 2018 19 it would be Rs 4,760 crore, for 2019-20 it will be Rs 5,475 crore and for 2020-21 Rs 6,296 crore. The state government is urging the Center for a 15 percent annual increase in the funding to beat the inflation.
Also, the center has agreed to bear the foreign exchange fluctuation on the foreign loans which is likely to benefit to the tune of about Rs 2,000 crore. Usually, states bear this for EAPs. AP already proposed 42000 Crore worth EAP schemes and out of that, nearly Rs 28,000 crore worth project have been received in-principle clearance from the Centre. More Projects will be proposed to make use of this Package and 65000 Crore with Amaravati infrastructure projects are also among these.