A feud between Andhra Pradesh and the central government over financial assistance appeared to be close to a resolution with the Telugu Desam Party (TDP) and the Bharatiya Janata Party (BJP) announcing on Saturday the contours of a broad plan for the southern state.

The central government is working on alternative plans to pay Andhra Pradesh for assistance promised under special category status and will make up for the state’s revenue deficit until 2020, the BJP and TDP said.

At a press conference in New Delhi on Saturday , BJP spokesperson GVL Narasimha Rao and Andhra party president K Hari Babu presented a 27-page note detailing measures and assistance given by the Centre to the southern state.

Key among them is the promise of a special development package and alternative measures after the 14th finance commission scrapped the class of a “special-category state”.

The BJP note detailed Rs 22,113 crore to be paid as revenue deficit, Rs 1,000 crore for the new capital of Amaravati, full funding for the irrigation component of the Polavaram project over the Godavari river, and a total investment of Rs 1 lakh crore on infrastructure.

The Union finance ministry refused to give details of the funding but confirmed that fresh discussions were underway between the Centre and the state.

“Funds are being given and will continue to be given. There are some new demands, and work is underway to ensure that they are also given. Discussions are underway between us and the state government, once we get a go-ahead from them about the plans we have drawn up, the money will be disbursed,” said a senior officer in the Union finance ministry.

The issue of financial assistance to Andhra Pradesh has roiled Parliament this week with chief minister N Chandrababu Naidu repeatedly expressing dissatisfaction with the central package.

Members of the TDP, a constituent of the ruling NDA, and the YSR Congress, the TDP’s main opposition in Andhra Pradesh, have protested in both houses of Parliament for more assistance.

The BJP claimed it had fulfilled promises made under the Andhra Pradesh reorganization act and that recent criticism of the central government was “mere propaganda”. “Whatever is left for implementation is under process…there is no need for any new thing,” Rao said.

"If we haven’t claimed, it does not mean that work has not been done… those who are making allegations, it is mere propaganda),” Rao said in frustrated tone.

Jubilant TDP claimed its protests had worked. “The Centre has responded positively to our demands. It has agreed to prepare an action plan within a week or 10 days on the implementation of the assurances. We hope the assurances come into action by March 5, when the budget session resumes,” senior TDP leader and Union minister of state for science and technology YS Chowdary told the media.

“We don’t want to take it granted till the announcements are made,” TDP Rajya Sabha member CM Ramesh said.

In the Rajya Sabha on Friday, Jaitley had assured that all promised funds to Andhra Pradesh will be allocated. “There are two areas which are being worked out. The first was amount in lieu of special package. Now the state had wanted the money to come by way of externally aided projects,” he said.

Sources in the central government as well as TDP said that in a letter on January 3, the state chief minister had requested the NDA government for a NABARD loan to make up for delays in allocation of central funds.

The BJP note said the 14th finance commission had abolished the class of a special category state, where the Centre funds 90% of the funds of a centrally sponsored scheme, as opposed to the usual 60%. “Alternate modalities of ways and means of payment of said amount are being finalised in consultation with government of Andhra Pradesh and same will be announced very soon,” the note read.

A number of new educational institutions were mentioned in the note and so was the Rs 25,000 crore Amaravati Expressway, for which the state government is preparing a detailed project report and acquiring land. In addition, central assistance of more than Rs 10,000 crore for urban housing and an alternative port site to Duggirajupatnam – which was proposed by the state but stalled due to technical reasons – were also mentioned.