Division of employees, their relocation and nativity issues

Division of Public Sector Enterprises (PSEs)


The division of the PSEs of the existing state of Andhra Pradesh

will be done according to the location of production facilities

With the exception of a few PSEs, the headquarters of most of

them are located in Hyderabad. However, it is the location of

the production facility that will determine whether an enterprise

will be included in new Andhra Pradesh or Telangana. The

headquarters may continue to remain in Hyderabad for the

period in which it will serve as the common capital. After this,

enterprises that are allocated to the new Andhra Pradesh would

have to reallocate their headquarters to the new capital city. If

these enterprises are contributing significantly to state revenues,

new Andhra Pradesh may relocate their headquarters at the

earliest to a location within new Andhra Pradesh.



Division of government employees


In relation to the Indian Administrative Services, Indian Police

Services and Indian Forest Services, two separate cadres will

be created: one for new Andhra Pradesh and the other for

Telangana. From the day of bifurcation, the employees of

public sector undertakings, corporations and other autonomous

bodies will continue to function in such undertaking, corporation

or autonomous bodies for one year. During this period, the

concerned corporate body will have to determine the modalities

for distributing the personnel between the two new States.


The Public Service Commission for the existing state of Andhra

Pradesh will also become the Public Service Commission for the

new Andhra Pradesh. Furthermore, it will serve as the Public

Service Commission for Telangana until the new Public Service

Commission is constituted there.


Division of pensioners

The Reorganization Act has made detailed provisions for the

division of pension liabilities of the existing state between the two

new States. This has been elucidated on in the Act. The focus on

pension comes from the experience of the division of other states

that have indicated unresolved issues pertaining to the division of

pension liabilities.

The provision states that the pension liabilities of the existing state will be divided between the two new States in the population ratio. The actual liabilities would differ from this ratio. In such acase, the state that has to pay more than its share in population would be reimbursed by the other one.


State Undertakings & Institutions

Section  68  catalogues  eighty-nine  (89)  State  Undertakings  have  been specified  in  the  Ninth  Schedule  of  the  Act.  Section 53  of  Andhra  Pradesh Reorganisation  Act  that  deals  with  the  apportionment  of  assets  and  liabilities relating to the State undertakings is as follows:

(1  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.

(2  Provided  that  where  the  operation  of  such  undertaking  becomes  interState by virtue of the provisions of Part II, the assets and liabilities of––

(a)  the  operational  units  of  the  undertaking  shall  be  apportioned between the two successor States on location basis;and (b)  the  headquarters  of  such  undertaking  shall  be  apportioned between the two successor States on the basis of population ratio.

  • Though eighty-nine  state  undertakings  were  included in  the  Ninth Schedule,  only  seventy  are  incorporated  societies  or  companies,  rest  being subsidiary    The  previous  central  government  has  not  paid  adequate attention  to  the  principles  and  the  methodology  for reorganisation  of  state enterprises  and  apportionment  of  assets  and  liabilities  between  the  two  states while formulating the Act. Though subsequently the undivided Andhra Pradesh government  has  constituted  an  expert  committee  for  apportionment  of  assets and  liabilities  of  the  state  undertakings,  including  the  staff,  it  is  far  from completing its task. This has created uncertainty in the management of the state undertakings during the interregnum.
  • The Section 75 of the Act, cited below, has provided for the continuation of facilities  in  one  hundred  seven  (107)  institutions  specified  in  the  Tenth Schedule to the Act.
  • A careful analysis  of  the  institutions  listed  in  the  Schedule-X indicate that twenty-two are government departments, ten are statutory bodies, seventeen  are  societies  and  two  are  categorised  as  board  /  council.  All  these fifty-five entities are required by both States in  their entirety and not amenable to  sharing  between  the  two    Further,  four  of the  hundred  seven institutions  are  not  functional,  nine  are  universities  and  sixteen  others  are integral part of government departments.
  • Consequently, the  Act  has  created  a  curious  situation  by  including  the heads  of  departments  (HOD)  and  regulatory  agencies  that  are  integral  to  the governance  of  every  State  in  the  Schedule-X,  while  excluding  several  other entities that have been established under the central and state statutes. Further, the  Act  has  remained  silent  on  the  apportionment  of staff,  assets,  ,  of  these institutions between the two States. Above all, since majority of the institutions included in the Tenth Schedule are headquartered inHyderabad, the residuary Andhra  Pradesh  would  take  a  long  time  to  replicate  them.  The  Act  has  not provided any provision to replicate these valuable  institutions in the residuary State.
  • several institutions  established  under  the  statute,  like  the Information Commission, State Election Commission, Lokayuktha, Human Rights Commission,  ,  have  not  found  place  anywhere  in  the  Act.  Therefore,  it  is crystal clear that the Act was designed without adequate attention to the details


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