New Delhi: The following is the full text of the Note on Telangana that the Union Cabinet endorsed on Thursday, October 3, 2013

BACKGROUND AND RATIONALE The demand for a separate State of Telangana to be carved out of the State of Andhra Pradesh has been repeatedly made by the people of Telangana region from time to time. The period from 1969 to 1973 witnessed violeht movements for separate State in the Telangana, coastal Andhra and Rayalaseema regions. A political settlement was arrived at in 1973 on the basis of a SixPoint Formula which brought peace for some time. But the undercurrent of ag tation for a separate Telangana State continued to rear its head under one pretext or the other. During the General Elections of 2004, the Common Minimum Programme (Para-8) of the UPA-I made a mention that the formation of Telangana State would be considered at an appropriate time after due consultations and consensus. Since then, the demand for a separate State of Telangana continued to gather momentum.
2 The Government of India, on 9th December, 2009 announced that the process for the formation of a separate State of Telangana would be initiated and this led to protests in both coastal Andhra and Rayalaseema regions. Following the law and order developments, on 23rd December, 2009, the Government of India conveyed that the action to form a Telangana State would not be taken until all concerned political parties in the State arrived at a consensus. Another round of counter-agitation started in the Telangana region demanding that the Central Government take immediate action to bifurcate the State of Andhra Pradesh.
3 The Union Home Minister appealed for peace in an All Party Meeting held on 6th January, 2010. Soon thereafter, in February, 2010 the Ministry of Home Affairs set up a FiveMember “Committee for holding Consultations on the Situation in Andhra Pradesh“ (CCSAP) with all concerned stakeholders. The CCSAP was chaired by Mr. Justice (Retd) Sri Krishna. The CCSAP submitted its report on 30th December, 2010 and suggested 6 possible options as a way forward.
4. In a meeting convened by the Union Home Minister on 6th January, 2011, the representatives of major political parties represented in the State Assembly were requested to convey their views on the report. In another All Party Meeting of the State leaders taken by the Union Home Minister, on 28th December 2012, there was an unanimous demand that the Union Government should take a stand based on the recommendations of Mr.Justice (Retd.) Sri Krishna Committee Report expeditiously, in order to remove uncertainties and political instability which was seriously affecting the State of Andhra Pradesh.
5. There were wide ranging political consultations spread over three years, deliberating with a cross sections of leaders of various political parties, elected representatives and citizens' groups, etc. on the pros and cons to concede the demand for a separate State of Telangana and to request the Central Government to take necessary action in accordance with the provisions of the Constitution of India for the same. However, concomi tantly there have been demands for safeguards to address the concerns of the people of coastal Andhra and Rayalaseema regions while considering the creation of a new State of Telangana. In this regard, the issues requiring attention to be addressed while considering the new State of Telangana out of the existing State of Andhra Pradesh are listed below: 5.1 To establish simultaneously and within a definite time frame, an institutional mechanism to address the concerns of the people of the regions of Coastal Andhra, Rayalaseema on matters relating to (but not limited to) the sharing of river waters, generation and distribution of electricity, safety and security of all residents in all the three regions, and the guarantee of the fundamental rights of all residents; 5.2 To declare that Hyderabad will be the common capital of both States for a period of ten years after the formation of the State of Telangana and to put in place legal and administrative measures to ensure that both State Governments can function efficiently from the common capital during the said period of ten years; 5.3 To assist in the building of a new capital for the residuary State of Andhra Pradesh within a period of ten years.
5.4 To declare the Polavaram irrigation project as a National project and to provide adequate funds to complete the same; 5.5 To identify the special needs of the backward regions/districts of Andhra Pradesh and to provide adequate funds for the development of those areas; and 5.6 To assist the Government of Andhra Pradesh, and after the formation of the State of Telangana, assist both State Governments to maintain law and order and ensure peace and harmony in all the regions/districts.
ISSUES FOR CONSIDERATION 6. After careful consideration of the Constitutional provisions, past precedents and present requirements, it is felt that the legislation to be enacted in regard to the creation of the proposed State of Telangana and the residuary State of Andhra Pradesh should be on the following lines:(i) NAME OF THE NEW STATE OF TELANGANA Prior to the formation of Andhra Pradesh, the region known as Telangana was part of the Erstwhile State of Hyderabad. Hence it is proposed that the new State be named as 'Telangana'. The name of the residuary State may be retained as Andhra Pradesh.
(ii) TERRITORIES OF THE NEW STATE OF TELANGANA The proposed State of Telangana may comprise ten districts of the existing State of Andhra Pradesh, namely Adilabad, Karimnagar, Medak, Nizamabad, Warangal, Ranga Reddy, Nalgonda, Mahbubnagar, Khammam and Hyderabad.
(iii) CAPITAL OF THE NEW STATE OF TELANGANA AND RESIDUARY STATE OF AP It is proposed that Hyderabad may function as the joint capital for both the States for a period of ten years. However, the new capital for the residuary State of Andhra Pradesh may be decided expeditiously to enable the process of transition within the stipulated period of ten years subsequent to its formation. (iv) GOVERNOR OF THE NEW STATE Article 153 of the Constitution of India provides:“There shall be a Governor for each State: Provided that nothing in this article shall prevent the appointment of the same person as Governor for two or more States“ The need for appointing the same person as the Governor for both the successor States may be considered, or in the alternative, separate Governors may be appointed for each of the successor States of Telangana and residuary Andhra Pradesh.
(iv) REPRESENTATION IN PARLIAMENT (a) THE COUNCIL OF STATES (RAJYA SABHA) The existing State of Andhra Pradesh has been allocated 18 seats in the Rajya Sabha. In order to give adequate representation to the new State in the Rajya Sabha, 7 seats may be allocated to the State of Telangana and the residuary State of Andhra Pradesh may be allocated 11 seats in the Rajya Sabha totaling 18 seats for both the States.
(b) THE HOUSE OF THE PEOPLE (LOK SABHA) The existing State of Andhra Pradesh has 42 seats in the Lok Sabha. After the redistribution, the new State of Telangana would have 17 seats and 25 seats would be for the residuary State of Andhra Pradesh, thus totaling 42 seats for both the States.
(v) STATE LEGISLATURES (a) LEGISLATIVE COUNCIL The existing State Legislature of Andhra Pradesh has a bicameral legislature and the Legislative Council has 90 members. Whether the new State of Telangana may also have a bicameral legislature may be decided according to the wishes of the new Legislative Assembly. The existing legislative council in the State of Andhra Pradesh will be reconstituted after the formation of the residuary State of Andhra Pradesh. However, the number of seats in the Legislative Councilor Legislative Councils may be decided separately.
(b) THE LEGISLATIVE ASSEMBLIES Article 170 of the Constitution of India provides that subject to the provisions of Article 333, the Legislative Assembly of a State shall consist of not more than 500, and not less than 60 members chosen by direct election from the territorial constituencies in the State.
The existing State Legislative Assembly of Andhra Pradesh has 295 members (including one nominated member) and 119 of these members belong to the Telangana region and 175 to the residuary State of Andhra Pradesh. Considering that the new State of Telangana may consist of ten districts, namely Adilabad, Karimnagar, Medak, Nizamabad, Warangal, Rangareddi, Nalgonda, Mahbubnagar, Khammam and Hyderabad, the Legislative Assembly of the State of Telangana may consist of 119 members and the residuary State of Andhra Pradesh may have the remaining 175 members. The lone sitting member of the Legislative Assembly of the existing State of Andhra Pradesh nominated under article 333 of the Constitution of India may be deemed to have been nominated to the Legislative Assembly of the new State of Telangana.
(c) DURATION OF LEGISLATIVE ASSEMBLIES It is proposed that the duration of the Legislative Assembly of each successor State may be governed by the provisions of article 172( 1) of the Constitution of India. The said article provides that the Legislative Assembly of every State, unless sooner dissolved, shall continue for five years from the date appointed for its first meeting and no longer.
The five year period in the case of the Legislative Assembly of the existing State of Andhra Pradesh is due to expire on 2ndJune, 2014.
(d) SPEAKERS AND DEPUTY SPEAKERS Based on the past precedent, it is proposed that the persons who immediately before the appointed day were the Speaker and the Deputy Speaker of the Andhra Pradesh Assembly shall be the Speaker and the Deputy Speaker of the residuary State of Andhra Pradesh and as soon as may be after the appointed day, the Legislative Assembly of the State of Telangana shall choose its Speaker and Deputy Speaker as per article 178 of the Constitution of India.
(e) RULES OF PROCEDURE The rules of procedure and conduct of business in force immediately before the appointed day with respect to the Legislative Assembly of the existing State of Andhra Pradesh may, until rules are made under clause (1) of the article 208 of the Constitution of India, have effect in relation to the Legislative Assembly of the residuary State of Andhra Pradesh and of the new State of Telangana, subject to such modifications and adaptations as may be made therein by the Speaker thereof.
(f) RESERVATION OF SEATS FOR SCHEDULED CASTES (SCs) & SCHEDULED TRIBES (STs) The Telangana region has, at present, five reserved Lok Sabha constituencies of which three are for SCs and two are for STs. There are thirty one reserved Assembly constituencies of which nineteen are for the SCs and twelve are for STs.
The number of reserved constituencies for the residuary State of Andhra Pradesh are four for SCs and one for STs in respect of Lok Sabha and twenty nine for SCs and seven for STs in respect of the Legislative Assembly.
The number and status of these reserved constituencies may remain unaltered until the next delimitation is carried out in both the States.
(vi) HIGH COURT The Andhra Pradesh High court has its principal seat in Hyderabad and there is no I bench of the High Court elsewhere. Hence, it is proposed that the existing High Court .
may exercise its jurisdiction over both the States until the arrangements are made, in consultation with the Chief Justice of India, for setting up separate High Courts within the respective jurisdictions of both the States, (vii) AUTHORISATION OF EXPENDITURE Based on the past precedent, it is proposed that necessary provision may be made in the Bill empowering the Governor of the existing State of Andhra Pradesh to authorize, at any time before the appointed day, such expenditure from the consolidated Fund of the State as he/she deems necessary for a period of not more than six months beginning with the appointed day, pending the sanction of such expenditure by the Legislature of the new State of Telangana. The Governor of the State of Telangana may also be empowered to authorize, after the appointed day, such further expenditure, as he/she deems necessary from the Consolidated Fund of the State for any period not extending beyond the said period of six months. The Bill may further provide that the reports of the Comptroller and Auditor General of India referred to in clause (2) of article 151 of the Constitution of India relating to the accounts of the existing State of Andhra Pradesh in respect of any period prior to the appointed day shall be submitted to the Governor of each of the successor States, who shall cause them to be laid before the respective Legislatures of the States. Furthermore, the Bill may provide that the allowances and privileges of the Governor of the new State shall, until provision in that behalf is made by Parliament by law under clause (3) of article 158 of the Constitution of India, be such as the President may, by order, determine. In addition, the Bill may provide for distribution of revenue between the two successor States.
(viii) APPORTIONMENT OF ASSETS AND LIABILITIES (a) Based on the past precedent, provision may be made in the Bill for apportionment of assets and liabilities between the two States, land and goods, treasury and bank balances, arrears of taxes, right to recover loans and advances, investments and credits in certain funds, assets and liabilities of State Undertakings, public debt, refund of taxes collected in excess, deposits, provident fund, pensions, contracts, liability in respect of actionable wrongs, liability as guarantor, items in suspense, apportionment of assets or liabilities by agreement , power of the Central Government to order allocation or adjustment in certain cases, certain expenditure to be charged on the Consolidated.
Fund, etc. The apportionment should be subject to such financial adjustment as may be necessary to secure a just, reasonable and equitable apportionment of the assets and liabilities amongst the successor States. Any dispute regarding the amount of financial assets and liabilities may be settled through mutual agreement between the two States, failing which by an order of the Central Government on the advice of the Comptroller and Auditor General of India.
(b) Based on the past precedent, the Central Government may by order-specify the amount that would pass to the State of Telangana. Taking note of the fact that on bifurcation of the existing State of Andhra Pradesh, the residuary State of Andhra Pradesh will have to develop a new capital requiring huge investment, a provision may be made in the Bill that adequate funds shall be determined and earmarked by the Government of India towards the cost of construction of the new capital of the residuary State of Andhra Pradesh.
(ix) PROVISION AS TO CERTAIN CORPORATIONS It is proposed that necessary provision may be made in the Bill for the continued functioning and operation of the statutory corporations and cooperative banks etc., of the existing State of Andhra Pradesh in the new State of Telangana till alternative arrangements are made. In so far as the Government Companies incorporated under the Companies Act is concerned, a provision on the lines of clause 73 of the Punjab Reorganisation Act, 1966 may be made in the Bill, which will obviate the necessity of obtaining approval of the National Company law Tribunal for any reconstitution/division of the existing State Government Companies at any future date.
(x) PROVISION AS TO THE SERVICES (a) ALL INDIA SERVICES: Based on past precedent, it is proposed that there may be separate cadres for the resid uary State of Andhra Pradesh and the new State of Telangana in respect of the Indian Administrative Service, Indian Police Service and Indian Forest Service. The determination of the initial strength and composition of the cadres and allocation of members of the Services to the new cadres may be regulated under the All India Services Act, 1951 and the rules framed there under. The initial recruitment to the respective cadres of the All India Services for the new State of Telangana and the residuary State of Andhra Pradesh may be made by the Central Government in consultation with the State Governments concerned.
However till such time separation is effected, the combined/joint cadre of the All India Services will continue to serve both the States. After the formation of the new State of Telangana and the residuary State of Andhra Pradesh, the State Governments in consultation with the Central Government will determine the total number of posts for each of the State.
(b) OTHER SERVICES A similar exercise would have to be undertaken in regard to the State and subordinate services by both successor States.
In this regard provisions may be incorporated in the Bill.
The manpower required for the new State of Telangana would have to be met from the existing State of Andhra Pradesh, and in case of disagreement it will be determined by the Government of India.
(c) PUBLIC SERVICE COMMISSION Article 315 of the Constitution of India governs the constitution of Public Service Commission. The article 315(2) reads: “(2) Two or more States may agree that there shall be one Public Service Commission for that group of States, and if a resolution to that effect is passed by the House or, where there are two Houses, by each House of the legislature of each of those States, Parliament may by law provide for the appointment of a Joint State Public Service Commission (referred to in this Chapter as Joint Commission) to serve the needs of those States“.
Hence it is proposed that the existing Public Service Commission may function as Joint State Public Service Commission until the arrangements are made by the respective House of Legislatures for setting up of separate Public Service Commissions within the respective jurisdictions of both the States.
(xi) LEGAL AND MISCELLANEOUSPROVISIONS On the lines of past precedent, it is proposed that ne cessary provision may be made in the Bill relating to territorial extent of laws, power to adapt laws, power to construe laws, power to name authorities, etc. for exercising statutory functions, legal proceedings. transfer of pending proceedings, right of pleaders to practice in certain cases, power to remove difficulties, power to make rules etc.
(xii) DISTRIBUTION OF WATER RESOURCES It is proposed that the Re-organisation Bill will contain specific provision to protect the status quo as well as the share in respect of water-use rights of basin States of InterState rivers. The water use rights of the two successor States should not only be protected but obligations of the existing State of Andhra Pradesh towards other cobasin States will similarly be required to be honoured by the two successor States. Provision would be made regarding the control and management of irrigation facilities which will provide service to both the successor States. The Central Government may be empowered to give directions in all matters relating to inter-state river water issues and also determine fair distribution and use of water between the two successor States. The constitution of Water Management Boards for the river basins and declaring the Polavaram Irrigation Project to be a National Project may be considered in the provisions of the Bill.
(xiii) ISSUES RELATED TO THE GENERATION AND DISTRIBUTION OF ELECTRICITY The generation of power transmission and distribution of electricity generated and all the related assets of generation, transmission and distribution would need to be allocated between the two States, and in case of disagreement will be determined by the Government of India, and incorporated in the Re-organization Bill.
(xiv) ISSUES RELATED TO SPECIAL PROVISIONS WITH RESPECT TO THE STATE OF ANDHRA PRADESH Article 371-0 has been inserted in the Constitution with respect to the existing State of Andhra Pradesh. After the formation of the State of Telangana and the residuary State of Andhra Pradesh this provision would need to be suitably amended or repealed based on the decision of the GoM.
7. Approval of the Cabinet is sought for the creation of a new State of Telangana by bifurcating the existing State of Andhra Pradesh.
8. Approval of the Cabinet is also sought to constitute a Group of Ministers (GoM) in order to address all the issues that need resolution at the Central and State Government levels, as mentioned in paras 5.1 to 5.6 and 6(i) to 6(xiv) as detailed above. The draft Terms of Reference for the GoM are given in Annexure-D.
9. Approval of the Cabinet is also sought for the GoM to determine the mechanism to ensure appropriate legal and administrative measures for both successor State Governments to function from the common capital of Hyderabad for a period of ten years, and to ensure the safety and security of all residents in all the three regions of coastal Andhra, Rayalaseema and Telangana including the guarantee of Fundamental Rights.
10. Approval of the Cabinet is further sought for the GoM to determine the special financial disbursements that may be required from the Central Government in addition to the revenues that would be available with the residuary State of Andhra Pradesh for the formation of a new capital for the residuary State of Andhra Pradesh, and to meet the special needs of the backward regions and districts.
The Home Minister has seen and approved the Note.

(S. Suresh Kumar) JOINT SECRETARY TO THE GOVT. OF INDIA Tel.: 23438100 iscs~nic.in New Delhi, Dated: 3rd October 2013 To The Cabinet Secretariat Rashtrapati Bhawan New Delhi.