The deadlock between Telangana and Andhra Pradesh continues to be distributed with debt of Rs 89,290 crore

The impasse in the public debt allocation for the former Manchester United External Auxiliary Project (EAP) between Telangana and Andhra Pradesh continues as both states take their respective positions on the issue.

15 EAP, loan of Rs 892.9 crore

There are 15 loans for the co-implementation of external auxiliary projects, totaling Rs 892.9 crore. Among them, according to the classification of the main accountants in the two states, these two loans are completely related to the projects in Andhra Pradesh, 12 loans (in variable ratios) of the nine projects (variable ratios) of the Telangana project.

For example, four projects – Hussainssagar Lake and catchment development; modernization and enhancement of transmission systems; Hyderabad Ring Road Project and Krishnapatnam Super Critical Power Station, all involving ₹4,265 crore , have been placed under Category A. Andhra Pradesh government contended that the loans be adopted on location basis and hence, its share of ₹4,265 crore is ₹1,335 crore of Krishnapatnam Power Station which is located in Andhra Pradesh while the remaining ₹2,929 crore should be borne by Telangana.

Andhra Pradesh further proposed the loan branch, totaling Rs 37555 crore, with a utilization rate of 9 euros and a share of Rs 189.2 crore.

Loan formula

Ministry of Economic Affairs, Joint Ministry of the Interior during the meeting convened in February [2025]conveys that in projects entirely in one country, the loan will be borne by each country, and according to the recommendations of the principal accountants in both states, the loan for the project should be undertaken at a variable ratio.

However, the formula has been opposed by the Telangana government, and under Section 54(1) of the April 2014 Act, all loans shall be allocated to all loans. The main accounting general can only suggest the apportionment amount, which should be in accordance with the provisions of the Act.

Furthermore, the views of the Telangana government were not extracted until the formula for calculating debt payments were reached. The money was adjusted from Telangana’s merged fund to Andhra Pradesh merged fund. A senior official told Hindus that the liability for the Telangana government could be around Rs 144.975 crore due to the wrong demands of the Andhra Pradesh government.