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More than 11 years after the bifurcation of Andhra Pradesh and the creation of Telangana, several key issues regarding the division of assets, liabilities, and financial settlements remain unresolved, leading to ongoing disputes and negotiations between the two states.
Despite several high-level meetings and court interventions, both states continue to grapple with contentious issues surrounding the implementation of the Andhra Pradesh Reorganisation Act, 2014, with billions of rupees and significant assets still in dispute.
In December 2024, a high-level meeting between the chief secretaries of Telangana (Shanti Kumari) and Andhra Pradesh (Neerabh Kumar Prasad) took place at the APIIC office in Mangalagiri, Andhra Pradesh. The meeting, lasting nearly two hours, resulted in some significant progress:
The division of assets and liabilities of institutions listed under Schedules 9 and 10 of the Andhra Pradesh Reorganisation Act remains unsettled and requires further deliberation. The resolutions reached by the ministers’ committee will require approval from the chief ministers of both states. For issues left unresolved at the ministerial level, direct discussions between the chief ministers will be necessary.
The division of assets, especially those listed in Schedules 9 and 10 (which include major institutions and corporations), has been a major point of contention. Andhra Pradesh has sought intervention from the Supreme Court to ensure a fair division, including the transfer of assets located in Hyderabad, which is now part of Telangana.
Both states are yet to agree on the division of nearly ₹9,000 crore in liabilities related to loans taken for externally aided projects before bifurcation. Andhra Pradesh argues for a territorial approach (liabilities for projects in a state to be borne by that state), while Telangana insists on a population-based division as per the Reorganisation Act. This disagreement could impose an additional financial burden of about ₹1,449.75 crore on Telangana.
Several disputes, including those over the division of educational, dairy, and mineral development assets, are pending before the Supreme Court. Some assets, such as those of the Andhra Pradesh State Council of Higher Education and the Dairy Development Cooperative, have seen court-mandated division ratios, but implementation remains incomplete.
Telangana has decided to approach the Supreme Court against Andhra Pradesh’s new river interlinking projects (Godavari-Banakacherla Link Scheme and Rayalaseema Lift Irrigation Scheme), arguing that these violate established water-sharing agreements and threaten Telangana’s irrigation and drinking water needs.
The Telangana Assembly recently passed the Appropriation Bill 2025, with the government highlighting the heavy debt burden inherited from the previous administration and ongoing financial pressures due to unresolved bifurcation issues. Political leaders from both states continue to seek special status and additional central assistance to offset the economic impacts of bifurcation and the protracted asset division.
“The resolution of these matters is crucial for the financial and administrative stability of both Andhra Pradesh and Telangana, yet 11 years after bifurcation, fundamental issues remain unaddressed.”
| Issue | Status as of June 2025 |
|---|---|
| Labour Cess (₹861 crore) | Agreement reached, allocation details pending |
| Excise Dues (₹81 crore) | AP agreed to refund to Telangana |
| Schedule 9 & 10 Assets | Division unresolved, pending further meetings/court |
| Employee Exchanges/Professional Tax | No final agreement, further meetings planned |
| External Project Liabilities (₹9,000 cr) | No agreement, AP favors territorial, TS favors population |
| Water Sharing/Irrigation Projects | Telangana moving Supreme Court against AP projects |
| Legal Disputes on Institutions | Multiple cases pending in Supreme Court |
Despite some progress in recent meetings, the bulk of contentious issues—especially those involving large financial liabilities and the division of major institutional assets—remain unresolved. Both states are expected to continue high-level discussions and, where necessary, seek judicial intervention to settle disputes. The resolution of these matters is crucial for the financial and administrative stability of both Andhra Pradesh and Telangana.
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