The Union Cabinet rejected the demand of the Seemandhra region for making Hyderabad a Union Territory and decided to retain Bhadrachalam division in the proposed state of Telangana.
The Cabinet, while clearing the Andhra Pradesh Reorganisation Bill, also decided that a special economic package will be given to both Telangana and residuary Andhra Pradesh.
Sources said Hyderabad will remain the joint capital of Telangana and residuary Andhra Pradesh for ten years and the city will not be made a Union Territory as strongly demanded by MPs and MLAs of Seemandhra.
The Bhadrachalam division will continue to be with Khammam district which will be part of Telangana. The law makers of Seemandhra region have been demanding inclusion of the area in residuary Andhra Pradesh as these are submerged area of Polavaram multi-purpose irrigation project, which will be part of residuary Andhra Pradesh.
The Bill says NTPC will construct a 4,000 MW power project in Telangana to solve the electricity problem in the region.
A petroleum university will be constructed in Seemandhra region while seats for Semmandhra students in educational institutes in Telangana will be reserved for ten years.