law: The Andhra Pradesh reorganization Act, 2014
  54.  Public Debt.
  1.    All
  
  liabilities on account of Public Debt and Public Account of the existing State
  
  of Andhra Pradesh outstanding immediately before the appointed day shall be
  
  apportioned on the basis of population ratio of the successor States unless a different
  
  mode of apportionment is provided under the provisions of this Act.
  2.    The
  
  individual items of liabilities to be allocated to the successor States and the
  
  amount of contribution required to be made by one successor State to another
  
  shall be such as may be ordered by the Central Government on the advice of the
  
  Comptroller and Auditor-General of India:
  Provided that till such orders are issued, the liabilities on
  
  account of Public Debt and Public Account of the existing State of Andhra
  
  Pradesh shall continue to be the liabilities of the successor State of Andhra
  
  Pradesh. 
  1. 
  
    
  2. 
  
    
  3.    The
  
  liability on account of loan raised from any source and re-lent by the existing
  
  State of Andhra Pradesh to such entities as may be specified by the Central
  
  Government and whose area of operation is confined to either of the successor
  
  States shall devolve on the respective States as specified in sub-section ( 4 ).
  4.    The
  
  public debt of the existing State of Andhra Pradesh attributable to loan taken
  
  from any source for the express purpose of re-lending the same to a specific
  
  institution and outstanding immediately before the appointed day shall,-
  a. 
  
    if re-lent to any local body, body corporate or other
  
  institution in any local area, be the debt of the State in which the local area
  
  is included on the appointed day; or
  b. 
  
    if re-lent to any other corporation or institution which becomes
  
  an inter- State corporation or institution on the appointed day, be divided
  
  between the States of Andhra Pradesh and Telangana in the same proportion in
  
  which the assets of such body corporate or institution are divided under the
  
  provisions of Part VII. 
  1. 
  
    
  2. 
  
    
  3. 
  
    
  4. 
  
    
  5.    Where a
  
  sinking fund or a depreciation fund is maintained by the existing State of
  
  Andhra Pradesh for repayment of any loan raised by it, the securities held in respect
  
  of investments made from that fund shall be divided between the successor
  
  States of Andhra Pradesh and Telangana in the same proportion in which the
  
  total public debt is divided between the two States under this section.
  6.    In this
  
  section, the expression "Government security" means a security created and
  
  issued by a State Government for the purpose of raising a public loan and
  
  having any of the forms specified in, or prescribed under, clause ( 2 ) of
  
  section 2 of the Public Debt Act, 1944.