Recently, the Supreme Court sought a response from the Centre on a petition filed by the Andhra Pradesh government seeking a fair, equitable and expeditious division of assets and liabilities with Telangana.


What is the issue between Andhra Pradesh and Telangana?

  • More than eight years after the bifurcation of the erstwhile united Andhra Pradesh, division of assets and liabilities between the two States remain elusive.
    • In February 2014, Andhra Pradesh Reorganisation bill, 2014 was passed by the Parliament of India.
    • This bill paved the way for the formation of Telangana state comprising ten districts from north-western Andhra Pradesh.
  • Both the States make their own interpretation of the provisions under the Andhra Pradesh Reorganisation Act 2014.
    • The issue involves 245 institutions with a total fixed asset value of ₹1.42 lakh crore.
    • Of 245 institutions, 91 institutions are under Schedule IX and 142 institutions are under Schedule X of the Act.
    • The division of another 12 institutions not mentioned in the Act has also become contentious between the States.
  • Several bilateral meetings between the two States as well as those convened by the Union Home Ministry failed.
  • The Andhra Pradesh government has now approached the Supreme Court seeking just, reasonable and equitable apportionment of assets and liabilities.


What are Andhra Pradesh government’s claims?

  • The AP Government is firm on the implementation of the recommendations given by the expert committee headed by retired bureaucrat Sheela Bhide.
    • The committee has recommended for bifurcation of 89 out of the 91 Schedule IX institutions.
  • It lamented that the Telangana government had selectively accepted the recommendations leaving others.
  • This was resulting in delays in division of assets and liabilities.


What has the Home Ministry said?

  • The Union Home Ministry has given clarity about the headquarter assets way back in 2017.
  • As per the memorandum issued by the Home Ministry,
    • in the case of one single comprehensive State undertaking (which includes the headquarters and the operational units in one facility) which is exclusively located in, or its operations are confined in one local area, it shall be apportioned on the basis of location as per sub-section (1) of Section 53 of the Reorganisation Act.


What is the stand of Telangana?

  • The Telangana government has contended that the expert committee’s recommendations were against the interests of Telangana.
    • The recommendations on the division of assets that are not a part of the headquarter assets attracted criticism from the Telangana government.
  • Telangana claims that there is a clear definition of division of headquarter assets in Section 53 of the Reorganisation Act.
    • The assets and liabilities relating to any commercial or industrial undertaking of the existing State of Andhra Pradesh, where such undertaking or part thereof is exclusively located in, or its operations are confined to, a local area, shall pass to the State in which that area is included on the appointed day, irrespective of the location of its headquarters.
  • The government is firm that the assets located outside the erstwhile united State like Andhra Pradesh Bhavan in New Delhi could be divided between the States on the basis of population as per the provisions of the Act.


What is the role of the Centre?

  • The Act empowers the Union Government to intervene as and when needed.
  • So far, several meetings of the dispute resolution committee headed by the Union Home Secretary and comprising of the Chief Secretaries of the two States could not break the impasse.