New Delhi/Vijayawada, Aug 19 (IANS): The central government has decided to provide further special assistance of Rs 1,976.50 crore to Andhra Pradesh during the current financial year.

The special assistance is to fulfil the Centre's commitment to the people of Andhra Pradesh and to compensate the financial impact arising out of the bifurcation of Andhra Pradesh, said an official statement on Thursday.

The amount includes Rs 1,176.50 to bridge the revenue deficit, Rs 350 crore for the development of seven backward districts covering Rayalaseema and North Coastal region and Rs 450 crore as assistance for the development of capital city.

With this the Centre has so far provided an assistance of Rs 8,379.50 crore to Andhra Pradesh which includes Rs 4,403 crore released during 2014-15 and Rs 2,000 crore released during 2015-16 in terms of the provisions under the Andhra Pradesh Re-organisation Act, 2014.

The Andhra Pradesh Re-organisation Act, 2014 entrusts the Central Government to make appropriate grants in the form of special assistance to the backward areas of successor states, provide assistance for creation of new capital of Andhra Pradesh and to provide assistance to bridge the resource gap arising post bifurcation.

The announcement of the special assistance was made amid the growing demand by Telugu Desam Party (TDP), a partner of the BJP-led National Democratic Alliance government, for fulfilling commitments made in the Act.

However, TDP's main demand for special category status to the state remained unfulfilled. TDP leader and Union Minister of State for Science and Technology Sujana Chowdary on Thursday said he expect an announcement in this regard by the end of August.

TDP legislator Bonda Umamaheswar Rao said mere release of funds came as a disappointment to five crore people of the state. He said the TDP would continue its fight till achieving special category status.