While the first amendment deals with resettlement and rehabilitation of those displaced due to Polavaram power project, the second relates to sharing of electricity generated by central units like NTPC between Telangana and Seemandhra.
The two-hour-long Cabinet meeting gave approval to the announcement made by Prime Minister Manmohan Singh for granting special category to Seemandhra region, comprising 13 districts, for five years.
Briefing reports, Union Minister Jairam Ramesh said that the Cabinet directed the Planning Commission to implement the decision to grant special category status to 13 districts of Seemandhra as per the Prime Minister's announcement.     

The Planning Commission is the administrative body and the central assistance will be routed through it, he added.
The proposal includes a six-point development package for Seemandhra like tax incentives.
These will include the four districts of Rayalaseema and three districts of north coastal Andhra to put the state's finances on a firmer footing, he said.
The Bill already provides for a special development package for backward regions of successor state of Andhra Pradesh, in particular for the districts of Rayalaseema and North Coastal Andhra Pradesh.
The development package will be on the lines of the KBK (Koraput-Bolangir-Kalahandi) Special Plan in Odisha and the Bundelkhand special package in Madhya Pradesh and Uttar Pradesh.
The Cabinet also decided to bring an amendment under which 85 percent of the electricity generated by central units will be allocated to the two states as per population and only 15 percent will be allocated based upon their actual consumption pattern of the last five years.
In the Bill, it is proposed that the power will be distributed on the basis of energy consumption in the last five years.
Ramesh said that the committee to bifurcate the bureaucracy will start working on Monday and a committee to select a new capital for Seemandhra will also be set up soon.

Replying to a question, Ramesh asserted that the notification regarding the appointed date for division will be issued during the tenure of the UPA government itself.
He said that the first amendment is to facilitate smooth and fair resettlement and rehabilitation on part of Polavaram multi-purpose project.
"The amendment will enable land for land in the same revenue division where people will be displaced," he said.
Politicians from Khammam district of Telangana region were demanding that the Polavaram submergence areas in Bhadrachalam revenue division should not be merged with Seemandhra region.
Ramesh said that the Cabinet approved another amendment in the Andhra Pradesh Reorganization Bill to clear ambiguity.
"There was some ambiguity in the bill on sharing of electricity. The bill said that power from central electricity generating stations will be allocated to two states based on their actual consumption capacity for five years," Ramesh said.
He added that the Cabinet amendment has today made it clear that only 15 percent of the unallocated power will be distributed as per the actual energy consumption of the regions for last five years
"85 percent power will continue to be allocated as per Gadgil formula, which is distribution of electricity largely on population ratio. People of Seemandhra and Telangana had asked for clarity on the issue," he said.
Ramesh said that these decisions flow out of the assurance given by the Prime Minister on the floor of Rajya Sabha on February 20.


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