According to the new policy introduced by the Central Government, the FRBM limit of Andhra Pradesh will not comprise of the externally aided projects. In case of such loans, the state governments are usually expected to offer a guarantee. However, in a special case, the center has decided to offer a counter guarantee, thereby reducing the burden on the state.
This act is sure to make it easier for the AP government to get their loans processed for important projects like Amaravati and Metro Rail Projects. The guarantee from the center also ensures quick and easy approval of loans. The loss of Special Status will be compensated by the Central Government by using EAPs of equal amount.
This is surely one of the greatest advantages of Special package. Funds of about INR 4749 crores will be offered by the World Bank which will work wonders for the Capital Construction in Amaravati. Since this is also an externally aided project, the counter guarantee from the Central Government can be expected.